Khiren Das vs. The State Of Assam And 2 Ors

Held

The Court held that the cancellation of GST registration under Section 29(2)(c) of the Act for non-furnishing of returns for a continuous period of six months has serious civil consequences. The Court noted the provisions of the proviso to sub-rule (4) of Rule 22 of the Central Goods and Services Tax Rules, 2017, which allows the proper officer to drop proceedings if the registered person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee. The Court found that in such situations, the empowered officer has the authority to drop the proceedings. Therefore, the Court directed that the petitioner should 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 sub-rule (4) of Rule 22, the concerned authority shall consider the application for restoration and pass necessary orders in accordance with the law. The entire process is to be completed expeditiously, within 60 days from the receipt of the order. The Court also clarified that the period under Section 73(10) of the CGST/SGST Act shall be computed from the date of this order, except for the financial year 2024-25, which will be as per Section 44. The petitioner will be liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, Khiren Das, a contractor and supplier, challenged an order dated January 18, 2022, by the Assistant Commissioner of State Taxes, Goalpara, cancelling his GST registration under Section 29 of the Assam Goods and Services Tax Act, 2017, read with Rule 22 of the Rules. The petitioner also challenged a subsequent order dated March 28, 2023, rejecting his application for revocation of the cancellation. The petitioner's registration was suspended on January 4, 2022, after a show-cause notice was issued under Section 29(2) of the Act and Rule 22(1) of the Rules. The petitioner claimed he did not notice the show-cause notice uploaded on the portal and consequently could not reply. He asserted that all returns were filed and taxes paid until the cancellation, except for GSTR-3B for December 2021, which was uploaded on January 7, 2022. Upon learning of the cancellation, he applied for revocation, but again claimed he missed the subsequent show-cause notice regarding the revocation application.

Key Issues

1. Whether the cancellation of the petitioner's GST registration under Section 29(2)(c) of the Assam Goods and Services Tax Act, 2017, for non-furnishing of returns for a continuous period of six months, was justified, considering the petitioner's claim of not receiving the show-cause notice and subsequent filing of returns and payment of taxes. 2. Whether the rejection of the petitioner's application for revocation of GST registration was justified, given the petitioner's assertion of not receiving the show-cause notice for revocation. Petitioner's arguments: The petitioner contended that he was willing to comply with the proviso to sub-rule (4) of Rule 22 of the Central Goods and Services Tax Rules, 2017, which allows for dropping proceedings if pending returns are furnished and tax dues, interest, and late fees are paid. He argued that cancellation of registration has serious civil consequences and that the proviso offers a remedy. Revenue's arguments: The judgment does not record specific arguments from the respondent State.