Smti Jinny Daimary vs. The State Of Assam And 2 Ors.
Original PDF →Facts
The petitioner, Smt. Jinny Daimary, operating as M/s. J. P. Enterprise, is registered under the CGST/AGST Act, 2017. She received a Show Cause Notice dated 12.04.2013 for non-filing of GST returns for six months. Due to unfamiliarity with online procedures and a fire incident affecting her business, she could not reply within the stipulated 30 days. Consequently, the Assistant Commissioner of State Tax, Nalbari-1, cancelled her GST registration on 02.06.2023. The petitioner later filed all pending returns up to March 2023 and paid dues, interest, and late fees. However, she was unable to file an application for revocation of cancellation as the 270-day time limit had expired.
Held
The Court held that the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, empowers the proper officer to drop proceedings if a person furnishes all pending returns and makes full payment of tax dues, along with applicable interest and late fee, even after receiving a show cause notice for non-filing of returns. Given that the cancellation of GST registration carries serious civil consequences, the Court found it appropriate to allow the petitioner an opportunity to approach the concerned authority. The Court directed the petitioner to approach the concerned authority within two months seeking restoration of her GST registration. If she complies with all requirements under the proviso to sub-rule (4) of Rule 22, the authority shall consider her application and pass necessary orders. The entire process is to be completed expeditiously, within 60 days from the receipt of the order. The period under Section 73(10) of the CGST/SGST Act will be computed from the date of this order, except for the financial year 2024-25. The petitioner is liable to pay arrears of tax, penalty, interest, and late fees.
Key Issues
1. Whether the petitioner, having failed to respond to the Show Cause Notice and subsequently being unable to file a revocation application due to time lapse, is entitled to any relief for the cancellation of her GST registration, considering the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017? Petitioner's contention: The petitioner argued that she 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. She highlighted that cancellation of registration has serious civil consequences and that she had paid all pending dues, interest, and late fees. She relied on similar orders passed in other writ petitions (Sanjoy Nath vs. Union of India and others, and Dipjyoti Borah v. State of Assam & ors.). Revenue's contention: The judgment does not record any specific arguments made by the revenue or state. However, the revenue was represented by the Standing Counsel, Finance & Taxation.
Sections Cited
Section 29(2)(c), Rule 22(4), Rule 22(4) proviso, Section 73(10), Section 44
AI-generated summary — verify with the full judgment below
Before: HON’BLE MR. JUSTICE N. UNNI KRISHNAN NAIR
Heard Shri R. S. Mishra, learned counsel for the petitioner and Shri B. Choudhury, learned Standing Counsel, Finance & Taxation, appearing on behalf of the respondent Nos. 1, 2 & 3. Page No.# 2/6
It is the case of the petitioner that she has been carrying out her proprietorship business under the name & style, “M/s. J. P. Enterprise” as the sole proprietor. She is an Assesee registered under the Central Goods and Services Tax(CGST) Act, 2017/Assam Goods and Services Tax(AGST) Act, 2017, bearing registration No. 18AVDPD6524G1ZS. On the reason of non-filing of GST returns for a continuous period of 6(six) months, the petitioner, herein, was served with a Show Cause Notice, bearing reference No.ZA180423009748D, dated 12.04.1013, asking her to furnish reply to the aforesaid Notice within a period of 30(thirty) days from the date of service of the Notice and it was mentioned in the aforesaid Notice that if the petitioner fails to furnish a reply within the stipulated date, or, fails 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. Thereafter, the impugned order, dated 02.06.2023, was passed by the Assistant Commissioner of State Tax, Nalbari-1, whereby the petitioner’s GST Registration has been cancelled for not furnishing returns for a continuous period of 6(six) or more months.
In the writ petition, the petitioner has contended that being non-conversant with the online procedure; she could not visit the GST portal and accordingly, could not submit any reply to the said Show Cause Notice, on time. It is further contended that when the petitioner came across the said Notice; the time for filing reply and attending the hearing, was already over and order had also been uploaded in the portal.
The petitioner has further contended that after recovering from the impact of loss suffered by her due to a fire incident occasioning in the petitioner’s business premises, she updated all her pending returns, upto the month of March, 2023, as allowed by the GST portal and while updating her returns, the petitioner had also discharged all her GST dues along with her late fees and interest.
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Thereafter, the petitioner tried to file the necessary application seeking revocation of the cancellation of her GST Registration, however, the same could not be filed as the time limit prescribed for filing of revocation application, had lapsed and a message was displayed on the screen “timeline of 270 days from the date of cancellation order provided to taxpayer to file application for revocation of cancellation is expired.”
Being aggrieved, the petitioner, herein, has approached this Court by filing the present writ petition.
Shri Mishra, learned counsel for the petitioner, has submitted that the petitioner is ready and willing to comply with all the formalities required as per the proviso to sub-rule(4) of Rule 22 of the Central Goods and Services Tax Rules, 2017. 8. As per the provisions of Section 29(2)(c) of the Central Goods and Services Tax Rules, 2017; 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 Central Goods and Services Tax Rules, 2017, has laid down the procedure for cancellation of the registration. The said Rule, being relevant, is extracted hereinbelow: “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.
Page No.# 4/6 (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 any tax, interest or penalty including the amount liable to be paid under subsection (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 of the Central Goods and Services Tax Rules, 2017, that if a person, who has been served with a show cause notice under Section 29(2)(c) of the Central Goods and Services Tax 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. 10. The learned counsel appearing for the parties have also referred to an Order, dated 11.10.2023, passed in WP(c) No. 6366/2023[Sanjoy Nath vs. Union of India and others], and Order, dated 18.07.2025, passed in WP(c)3926/2025 [Dipjyoti Borah v. State of Assam & ors.]; wherein, the petitioners, therein, are similarly situated like the petitioner, herein.
Having regard to the fact that the GST Registration of the petitioner, herein, has been cancelled under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, for the reason that she did not submit returns for a period of 6(six) months, or, more, and the provisions contained in the proviso to sub-rule(4) of Page No.# 5/6 Rule 22 of the of the Central Goods and Services Tax Rules, 2017, and cancellation of registration entailing serious civil consequences; this Court is of the 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 so empowered, has the authority and juri iction to drop the proceedings and pass an appropriate order in the prescribed Form.
In that view of the matter; this writ petition is hereby disposed of by providing that the petitioner, herein, shall approach the concerned authority within a period of 2(two) months from today seeking restoration of her 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 of the Central Goods and Services Tax Rules, 2017; the concerned authority shall consider the application of the petitioner, herein, for restoration of her GST Registration and pass necessary orders in accordance with law.
The entire process be completed expeditiously and preferably within an outer limit of 60(sixty) days from the date of receipt of a certified copy of this order.
It is needless to say that the period as stipulated under the provisions of Section 73(10) of the Central Goods and Services Tax Act/State Goods and Services Tax Act, shall be computed from the date of this order, except, for the financial year 2024-25, which shall be as per the provisions of Section 44 of the Central Goods and Services Tax Act/State Goods and Services Tax Act. The petitioner, herein, shall also be liable to make payment of arrears i.e. tax, penalty, interest and late fees.
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With the above directions, the instant writ petition, accordingly, stands disposed of.
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.