Mamaine Dey vs. The Union Of INDIA And 2 Ors.

Held

The Court held that the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, allows for dropping proceedings if a person, served with a show cause notice under Section 29(2)(c) for non-furnishing of returns, furnishes all pending returns and makes full payment of tax dues, including applicable interest and late fees. The Court reasoned that cancellation of GST registration carries serious civil consequences. Therefore, in such an event, the empowered 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, seeking restoration of her 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) shall be computed from the date of the order, except for the financial year 2024-25, which shall be as per Section 44. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, Mamaine Dey, is a sole proprietor registered under the CGST Act, 2017/AGST Act, 2017. Due to non-filing of GST returns for six consecutive months, she received a show cause notice dated March 12, 2024, from the Superintendent, Central Goods and Services Tax, Naharkatia-1, Duliajan Range. The notice required a reply within 30 days, failing which the case would be decided ex-parte. Subsequently, an order dated May 6, 2024, was passed by the Superintendent, cancelling the petitioner's GST registration without assigning any reason. The petitioner claims she was not conversant with online procedures, missed the reply deadline, and by the time she updated her pending returns and paid dues with late fees and interest, the time limit for filing a revocation application had expired. She approached the High Court via a writ petition.

Key Issues

1. Whether the cancellation of GST registration, based on non-furnishing of returns for six months, can be dropped if the petitioner furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee, as per the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017? Petitioner's contention: The petitioner argued that she is ready and willing to comply with the formalities stipulated in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. She contended that she has updated all pending returns up to March 2024 and discharged all GST dues, including late fees and interest. She relied on the principle that cancellation of registration entails serious civil consequences and that the proviso to Rule 22(4) allows for dropping proceedings under such circumstances. Revenue's contention: The judgment does not record any specific arguments made by the respondents (Union of India and others).