M/S Baruah Enterprise vs. The Union Of INDIA And 3 Ors.

Held

The Court held that the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months, can be considered for dropping the proceedings if the petitioner complies with the proviso to Rule 22(4) of the CGST Rules, 2017. The Court noted that cancellation of registration entails serious civil consequences. Therefore, in the event the petitioner approaches the empowered officer by furnishing all pending returns and making full payment of tax dues, along with applicable interest and late fees, the officer may consider dropping the proceedings and passing an appropriate order. The Court directed the petitioner to approach the concerned authority within two months from the date of the order for restoration of its GST registration, provided it complies with all requirements of the proviso to Rule 22(4). The Court also clarified that the period under Section 73(10) of the CGST/SGST Act would be computed from the date of the instant order, except for the financial year 2024-25, which would be as per Section 44. The petitioner would be liable to pay arrears of tax, penalty, interest, and late fees.

Facts

M/s Baruah Enterprise, a partnership firm registered under the CGST Act, 2017, had its GST registration cancelled by the Superintendent, Central Goods and Services Tax, Dibrugarh-II Range, vide an order dated 21.07.2020. This cancellation was due to non-filing of GST returns for a continuous period of six months. The petitioner received a show cause notice dated 26.06.2020, but claims it could not reply due to the COVID-19 pandemic causing its office closure. The petitioner's subsequent appeal against the cancellation order was dismissed on 04.07.2025. Aggrieved, the petitioner filed a writ petition before the Gauhati High Court, expressing willingness to comply with the requirements for restoration.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months, can be set aside or modified in light of the proviso to Rule 22(4) of the CGST Rules, 2017, when the petitioner is willing to furnish pending returns and pay tax dues, interest, and late fees? The petitioner argued that due to the COVID-19 pandemic, its office was closed, preventing timely reply to the show cause notice. It contended that it is now ready to comply with the conditions stipulated in the proviso to Rule 22(4) of the CGST Rules, 2017, for dropping the proceedings. The petitioner relied on the principle that cancellation of registration has serious civil consequences and that the proviso offers a mechanism for resolution. The respondents (Union of India and others) did not appear to have made specific arguments against the petitioner's willingness to comply with the proviso, as the Court focused on the applicability of Rule 22(4) and the petitioner's submissions.