M/S Ananya Enterprise 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 Central Goods and Services Tax Act, 2017, for non-furnishing of returns for a continuous period of six months, can be dropped if the registered person complies with the conditions stipulated in the proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017. The Court reasoned that the proviso explicitly empowers the officer to drop proceedings and pass an order in Form GST REG-20 if the person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee. The Court emphasized that cancellation of registration carries serious civil consequences. Therefore, 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 as provided in the proviso to Rule 22(4), the concerned authority shall consider the application and pass necessary orders in accordance with law. The Court also directed that the entire process be completed expeditiously, preferably within 60 days from the receipt of the order. The period stipulated 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, M/s Ananya Enterprise, a proprietorship firm dealing in scraps, had its GST registration cancelled by the Assistant Commissioner of State Taxes, Guwahati-B2, on September 8, 2023, under Section 29 of the Assam Goods and Services Tax Act, 2017. The cancellation was based on the firm's failure to file GST returns for the period July 2023 to September 2023. The petitioner claimed the non-filing was due to oversight and not an intention to evade taxes. They also contended they were unaware of the show-cause notices and cancellation order, preventing them from filing for revocation or appeal within the prescribed limitation period. Subsequently, the petitioner filed NIL returns for the period and paid applicable interest and late fees, but their request for restoration was denied due to expired limitation periods. This writ petition was filed challenging the cancellation order.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, for non-furnishing of returns for a continuous period of six months, can be dropped if the registered person furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee, as per the proviso to Rule 22(4) of the Central Goods and Services Tax Rules, 2017? Petitioner's arguments: The petitioner argued that they are ready and willing to comply with the requirements of the proviso to Sub-Rule (4) of Rule 22 of the Central Goods and Services Tax Rules, 2017. They contended that cancellation of registration entails serious civil consequences and that the proviso allows for dropping proceedings if pending returns are filed and dues are paid. They relied on similar orders passed in other writ petitions (Sanjoy Nath vs. Union of India and others, and Dipjyoti Borah v. State of Assam & ors.). Revenue's arguments: The judgment does not record specific arguments from the respondent revenue authorities.