Sri Prabhat Das vs. The Union Of INDIA And Ors

Held

The Court held that the cancellation of GST registration, under Section 29(2)(c) of the Act for non-furnishing of returns for six months, entails serious civil consequences. Considering the petitioner's subsequent compliance by furnishing all pending returns and making full payment of tax dues, along with applicable interest and late fees, the Court found it appropriate to allow the petitioner to approach the concerned authority for restoration of his GST registration. The Court directed the petitioner to approach the concerned authority within two months from the date of the order, seeking restoration of his GST registration. If the petitioner complies with all requirements as provided in the proviso to Rule 22(4) of the CGST Rules, 2017, 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) of the CGST/SGST Act shall be computed from the date of the instant 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. This order was passed in the interest of justice, irrespective of the fact that the order of rejection of appeal was not specifically challenged.

Facts

The petitioner, Sri Prabhat Das, operating under M/s Priyanshi Enterprises, is a registered assessee under the CGST Act, 2017/AGST Act, 2017. Due to non-filing of GST returns for six months, he received a show cause notice dated 13.11.2023. The petitioner failed to reply within the stipulated period, citing unfamiliarity with online procedures and miscommunication with his tax consultant. Consequently, the Superintendent, Central Goods and Services Tax, Guwahati-B-2/I-C Range, passed an order dated 19.04.2024 cancelling his GST registration without assigning reasons. The petitioner subsequently updated all pending returns up to June 2024 and paid all dues, including late fees and interest. However, he could not file an application for revocation of cancellation as the time limit of 270 days from the cancellation order had expired.

Key Issues

1. Whether the cancellation of GST registration, which entails serious civil consequences, should be reconsidered in light of the petitioner's subsequent compliance and the provisions of the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017? Petitioner's contention: The petitioner argues that he is ready and willing to comply with all formalities as per the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. He contends that he has since updated all pending returns and discharged all GST dues, including late fees and interest. He relies on the principle that cancellation of registration has serious civil consequences and should be viewed leniently when there is subsequent compliance. Respondent's contention: The respondents contend that an appeal preferred against the impugned order of cancellation has already been dismissed, and this dismissal order has not been challenged. They rely on Section 29(2)(c) of the Act and Rule 22 of the CGST Rules, 2017, which lay down the procedure for cancellation of registration due to non-furnishing of returns for six months.