Silpi Das vs. The Union Of INDIA And 2 Ors.

Held

The Court held that given the petitioner's subsequent compliance by furnishing all pending returns and making full payment of tax dues, along with applicable interest and late fees, and considering the serious civil consequences of GST registration cancellation, the proceedings should be dropped. The Court referred to 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. The Court directed the petitioner to approach the concerned authority within two months for restoration of her GST registration. If she complies with the requirements of the proviso to Rule 22(4), the authority shall consider her application for restoration 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, and the petitioner would be liable to pay arrears of tax, penalty, interest, and late fees.

Facts

The petitioner, Silpi Das, a sole proprietor registered under GST, had her registration cancelled by the Superintendent, Central Goods and Services Tax, Naharkatia-1, vide an order dated 02.03.2023. 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 she was not conversant with online procedures and missed the reply deadline. She later updated all pending returns up to March 2023 and paid all dues, including late fees and interest. However, she could not file an application for revocation of cancellation as the 270-day timeline had expired. She approached the High Court seeking relief.

Key Issues

1. Whether the petitioner can seek restoration of her GST registration despite the expiry of the statutory timeline for filing a revocation application, given her subsequent compliance with return filing and payment of dues? The petitioner argued that she was willing to comply with all formalities as per the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. She emphasized that cancellation of registration entails serious civil consequences and that she had rectified her non-compliance by filing pending returns and paying all dues. She relied on the principle that justice should be done when there is a willingness to comply with the law. The respondents did not record any specific arguments against the petitioner's plea for restoration based on her subsequent compliance.