M/S S. D. Enterprise vs. Union Of INDIA And 3 Ors

Held

The Court held that the cancellation of GST registration, which entails serious civil consequences, can be considered for dropping the proceedings if the petitioner complies with the conditions laid out in the proviso to Rule 22(4) of the CGST Rules, 2017. This proviso allows for the dropping of proceedings if the person, after being served a show cause notice under Section 29(2)(c) of the CGST Act, 2017, furnishes all pending returns and makes full payment of tax dues, including applicable interest and late fee. The Court found that the Superintendent, being the duly empowered officer, has the authority and jurisdiction to pass an order in the prescribed Form GST REG-20 in such circumstances. The Court directed the petitioner to approach the concerned authority within two months seeking restoration of their GST registration and to comply with all requirements of the proviso to Rule 22(4). The concerned authority is to consider the application and take necessary steps for restoration expeditiously. The Court also noted that the period stipulated under Section 73(10) of the CGST/SGST Act shall be computed from the date of the judgment, except for the financial year 2024-25, and the petitioner is liable to pay arrears.

Facts

The petitioner, M/s S. D. Enterprise, an assessee registered under the CGST Act, 2017, had its GST registration cancelled by an order dated 06.10.2020, passed by the Superintendent, Central Goods and Service Tax, Dibrugarh-2. This cancellation was due to non-filing of GST returns for a continuous period of six months or more. The petitioner received a show cause notice dated 30.04.2020, but no date for personal hearing was notified. Subsequently, the petitioner was unable to file an application for revocation of cancellation as the prescribed time limit had elapsed. The petitioner filed a writ petition before the Gauhati High Court challenging the cancellation order.

Key Issues

1. Whether the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing 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 Rule 22(4) of the CGST Rules, 2017? Petitioner's contention: The petitioner argued that due to reasons beyond their control, they could not submit the returns required under Section 39(1) of the CGST Act, 2017, for approximately six months. They are ready and willing to comply with the formalities stipulated in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. The petitioner also referred to a previous order in a similar writ petition (Ansari Construction vs. Union of India and others). Revenue's contention: The judgment does not record any specific arguments made by the revenue or state.