D.D. Construction vs. The Union Of INDIA And 3 Ors.
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The petitioner, D.D. Construction, a registered entity under the CGST Act, 2017/AGST Act, 2017, had its GST registration cancelled by the Superintendent, Central Goods and Services Tax, Naharkatia (Respondent No. 4) via an order dated 20.02.2024. This cancellation was due to non-filing of GST returns for a continuous period of six months or more, following a show cause notice issued on 14.11.2023. The petitioner subsequently attempted to file an application for revocation of the cancellation but found that the prescribed time limit had elapsed. Aggrieved by this, the petitioner filed a writ petition before the Gauhati High Court.
Held
The Court held that the cancellation of GST registration under Section 29(2)(c) of the CGST Act, 2017, for non-filing of returns for six months or more, entails serious civil consequences. The Court noted the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, which allows for dropping proceedings if the person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee. Citing a similar case, Ansari Construction vs. The Union of India & Ors., the Court directed the petitioner to approach the concerned authority within two months from the date of the judgment seeking restoration of its GST registration. If the petitioner complies with the requirements of the proviso to sub-rule (4) of Rule 22, the authority is empowered to consider the application for restoration 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 judgment, except for the financial year 2024-25, which will be as per Section 44. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.
Key Issues
1. Whether the petitioner, having failed to file GST returns for a continuous period of six months or more, is entitled to seek restoration of its GST registration, considering the provisions of Section 29(2)(c) of the CGST Act, 2017 and Rule 22(4) of the CGST Rules, 2017? The petitioner argued that due to reasons beyond its control, it could not submit the required returns under Section 39(1) of the CGST Act, 2017 for approximately six months. It expressed readiness to comply with the formalities stipulated in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. The respondents, represented by the Standing Counsel, CGST, did not record any specific arguments against the petitioner's plea for restoration based on compliance with the proviso.
Sections Cited
Section 39(1), Section 29(2)(c), Rule 22(4), Rule 22, Section 73(10), Section 44
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Cause title — parties, addresses and appearances
ORDER 06.08.2025
Heard Shri SK Agarwal, learned counsel for the petitioner and Shri S Chetia, learned Standing counsel, CGST for the respondent nos. 2 to 4. 2. It is the case of the petitioner that it is an Assesee registered under the provisions of the Central Goods and Services Tax (CGST) Act, 2017/Assam Goods and Services Tax (AGST) Act, 2017 bearing registration no. 18AALFD2009F1ZQ and because of non-filing of GST returns for a continuous period of six months, the petitioner was served with a show cause notice bearing reference no. ZA181123011635X dated 14.11.2023 asking it to furnish reply to the aforesaid notice within a period 30 (thirty) days from the date of service of notice and it was mentioned in the aforesaid show cause notice that if the petitioner fails to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of the available records and on merits. However, date for personal hearing was notified on 12.12.2023. Thereafter, the impugned order dated 20.02.2024 was issued by the Superintendent, Naharkatia-respondent No.4, cancelling GST registration of the petitioner for not furnishing returns for a continuous period of 6 (six) or more months.
Thereafter, the petitioner tried to file the necessary application seeking revocation of GST cancellation, however, the same could not be filed as the time limit prescribed for filing of revocation application was elapsed.
Being aggrieved, the petitioner approached this Court by filing the present writ petition.
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Shri Agarwal, learned counsel appearing for the petitioner has submitted that due to reasons beyond his control, the petitioner could not submit the returns required to be submitted under Section 39(1) of the CGST Act, 2017 for a period of about 6 (six) months or more. However, he has submitted that the petitioner is ready and willing to comply with all the formalities required as per proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017. 6. As per Section 29(2)(c), an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration.
Rule 22 of the CGST Rules, 2017 being bone of contention is quoted herein below:-
“Rule 22 : Cancellation of Registration (1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled. (2) The reply to the show cause notice issued under sub-rule [1] shall be furnished in FORM REG-18 within the period specified in the said sub-rule. (3) Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under Rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule [1], [or under sub-rule (2A) of Rule 21A] cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of Page No.# 4/5 any tax, interest or penalty including the amount liable to be paid under sub-section [5] of Section 29. (4) Where the reply furnished under sub-rule [2] [or in response to the notice issued under sub-rule (2A) of Rule 21A] is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20 : Provided that where the person instead of replying to the notice served under sub rule [1] for contravention of the provisions contained in Clause [b] or Clause [c] of sub- section [2] of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20. (5) The provisions of sub- rule [3] shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself.”
It is discernible from a reading of the proviso to sub-rule (4) of Rule 22 of the CGST Rules 2017 that if a person, who has been served with a show cause notice under Section 29(2)(c) of the CGST Act, 2017, is ready and willing to furnish all the pending returns and to make full payment of the tax itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form i.e. Form GST REG-20. 9. The learned counsel for the parties have also referred to an Order dated 26.05.2025 passed in a writ petition, WP(C) No. 2793/2025 (Ansari Construction vs. The Union of India & Ors.) wherein the petitioner therein was similarly situated like the present petitioner.
Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 (six) months and more; and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the Page No.# 5/5 considered view that in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, has the authority and juri iction to drop the proceedings and pass an order in the prescribed Form.
In such view of the matter, this writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 2 (two) months from today seeking restoration of his GST registration. If the petitioner submits such an application and complies with all the requirements as provided in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the concerned authority shall consider the application of the petitioner for restoration of his GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioner as expeditiously as possible.
With the observations made and the direction given above, the writ petition is disposed of. No cost.
It is needless to say that the period as stipulated under Section 73 (10) of the Central Gst Act/State GST Act shall be computed from the date of the instant judgment, except for the financial year 2024-25, which shall be as per Section 44 of the Central GST Act/State GST Act. The petitioner herein also be liable to make payment of arrears i.e. tax, penalty, interest and late fees.
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.