Bornali Borgohain vs. The Union Of INDIA And Othrs

Held

The Court held that the cancellation of GST registration carries serious civil consequences. It noted that the petitioner's registration was cancelled under Section 29(2)(c) of the Act for non-furnishing of returns for six months. The Court referred to the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which permits an officer to drop proceedings if pending returns are filed and tax dues, along with interest and late fees, are paid. The Court also took into account a previous order in a similar case (WP(C) No.6366/2023). Consequently, the Court directed the petitioner to approach the concerned authority within two months for restoration of her GST registration, provided she furnishes all pending returns and makes full payment of tax dues, interest, and late fees. The concerned authority was directed to consider the application in accordance with law and expedite the restoration process. The Court clarified that the period stipulated under Section 73(10) of the CGST/SGST Act would be computed from the date of the instant order, with an exception for the financial year 2024-25 as per Section 44.

Facts

The petitioner, Bornali Borgohain, operating as M/S L. Gohain & Brothers, had her GST registration cancelled by the Superintendent, Central Goods and Services Tax, Dibrugarh, via an order dated 23.05.2020. This cancellation was due to non-filing of GST returns for a continuous period of six months. The petitioner received a show cause notice dated 30.04.2020, but claims she could not reply due to the COVID-19 pandemic and her office being closed. By the time she became aware of the notice and the subsequent cancellation order, the time for filing a reply and for applying for revocation of cancellation had expired. She had subsequently updated all pending returns and paid dues, including late fees and interest.

Key Issues

1. Whether the petitioner is entitled to seek restoration of her GST registration despite the expiry of the time limit for filing a revocation application, considering the circumstances of the COVID-19 pandemic and her subsequent compliance with pending returns and dues? The petitioner argued that due to the COVID-19 pandemic, her business operations were affected, preventing her from responding to the show cause notice within the stipulated time. She further contended that she has since rectified her non-compliance by filing all pending returns and discharging all tax dues, interest, and late fees. She relied on 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 respondents, represented by the CGST, did not present any arguments in the judgment.