Prashujya Mech vs. The Union Of INDIA And 2 Ors.

Held

The Court held that the cancellation of GST registration entails serious civil consequences. Considering the petitioner's submission that he has now furnished all pending returns and made full payment of tax dues, along with applicable interest and late fees, and in light of the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the Court found it appropriate to grant relief. The Court directed the petitioner to approach the concerned authority within two months from the date of the order seeking restoration of his GST registration. If the petitioner complies with all requirements as per 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. The petitioner is liable to pay all arrears.

Facts

The petitioner, Prashujya Mech, a sole proprietor registered under the CGST/AGST Act, 2017, had his GST registration cancelled by the Superintendent, Central Goods and Services Tax, Naharkatia Range, via an order dated 13.04.2023. This cancellation was due to non-filing of GST returns for a continuous period of six months, following a show cause notice dated 15.01.2023. The petitioner contended he was not conversant with online procedures and missed the reply deadline. He subsequently updated all pending returns up to April 2023, paid dues, late fees, and interest. However, he could not file an application for revocation of cancellation as the 270-day timeline had expired. He approached the High Court seeking relief.

Key Issues

1. Whether the petitioner is entitled to seek revocation of his GST registration cancellation, despite exceeding the prescribed timeline for filing a revocation application, given that he has since filed all pending returns and paid all dues, interest, and late fees? Petitioner's Arguments: The petitioner argued that he was not conversant with online procedures, leading to the missed deadline for replying to the show cause notice. He emphasized that he has now rectified all pending returns and paid all tax dues, interest, and late fees. He relied on 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 dues are paid. He also referred to a similar case, WP(C) No.6366/2023 (Sanjoy Nath vs. The Union of India and others). Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue or state. However, the context implies the revenue's stance would be based on the procedural timelines stipulated in the CGST Act and Rules.