Gauhati High Court Rules on GST Registration Restoration

In a significant ruling, the Gauhati High Court has held that GST registration can be restored for taxpayers who defaulted under Section 29(2)(c) of the CGST Act, provided they clear their pending returns and dues.

The case involved applicants whose GST registrations were cancelled for not filing GST returns for over six consecutive months, leading to a show cause notice and subsequent ex parte cancellation order. The taxpayers cited cluelessness regarding the online GST system and financial issues as reasons for their non-compliance.

The High Court, adopting a liberal approach, emphasized that GST registration cancellation can have serious civil consequences. The court noted that the proviso to Rule 22(4) of the CGST Rules, 2017, offers a chance for restoration under regulatory norms. Instead of directly restoring the registration, the court directed the applicants to submit an application for restoration to the proper officer within two months, adhering to all provisions under the proviso to Rule 22(4).

Upon compliance, the proper officer is mandated to acknowledge the request and pass pertinent orders as per the law within the specified timeframe. The court also clarified that regulatory timelines under Section 73(10) will be evaluated from the date of the court's order (with exceptions), and applicants remain obligated to file all due tax, interest, penalty, and late fees.