M/S Lakhipriya Hazarika vs. The Union Of INDIA And 3 Ors.

Held

The Court held that the cancellation of GST registration entails serious civil consequences. Considering the provisions of Section 29(2)(c) of the CGST Act, 2017, and the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the Court found that if the petitioner furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fees, the concerned authority may consider dropping the proceedings. The Court directed the petitioner to approach the concerned authority within two months from the date of the order, seeking restoration of their GST registration. If the petitioner complies with all the requirements of the proviso to Rule 22(4), the authority shall consider the application for restoration in accordance with law and take necessary steps expeditiously. The Court also clarified that the period stipulated under Section 73(10) of the CGST/SGST Act shall be computed from the date of the instant order, except for the financial year 2024-25, which will be as per Section 44. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, M/s Lakhipriya Hazarika, a partnership firm registered under the CGST/AGST Act, 2017, had its GST registration cancelled by the Superintendent, Central Goods and Services Tax, Dibrugarh-1, vide an order dated 14.04.2020. This cancellation followed a show cause notice dated 08.01.2020 for non-filing of GST returns for six continuous months. The petitioner claims they were not conversant with online procedures and missed the reply deadline. An appeal filed by the petitioner was dismissed on 10.07.2025. Aggrieved, the petitioner filed a writ petition before the Gauhati High Court, expressing willingness to comply with the requirements of the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017.

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? Petitioner's contention: The petitioner argued that they are ready and willing to comply with the conditions stipulated in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if pending returns are furnished and tax dues, along with interest and late fees, are paid. Revenue's contention: The judgment does not explicitly record any specific arguments made by the revenue or state. However, the context implies the revenue's stance was in support of the cancellation order passed by the Superintendent.