GST Registration Restoration Allowed Upon Compliance with Rule 22(4) Proviso

Case Title:
Sri Hemanta Kumar Bhagawati v. State of Assam & Ors.

Court:
Gauhati High Court

Petition No.:
WP(C)/2700/2025

Category of Dispute:
GST Registration Cancellation

Date of Judgement:
30-05-2025

Relevant Sections:
Section 29(2)(c), Section 73(10), Section 44 of CGST Act, 2017
Rule 22(4) of CGST Rules, 2017

Facts of the Case:

(Para 2–4)

• The petitioner, a sole proprietor under the name “Hemanta Kumar Bhagawati (Contract Division),” failed to file GST returns for over six months.

• A show cause notice dated 15.01.2023 was issued under Rule 22(1), and subsequently, registration was cancelled on 16.02.2023 under Section 29(2)(c) of CGST Act.

• The petitioner did not respond due to financial hardship and limited technical knowledge.

• He later attempted to file for revocation but was barred by expiry of the 270-day limit under the system-generated restriction.

Question(s) in Consideration:

(Para 5–9)

• Whether the petitioner, whose registration was cancelled for non-filing of returns, is eligible for restoration upon compliance with Rule 22(4) of CGST Rules?

• Whether the timeline for revocation can be relaxed where civil consequences are substantial?

Observations of the Court:

(Para 9–11)

• The Court interpreted the proviso to Rule 22(4) of CGST Rules, which allows restoration of GST registration if the taxpayer files all pending returns and pays tax, interest, and late fees.

• The Court referenced the case Sanjoy Nath v. Union of India & Ors. (WP(C) No. 6366/2023) where a similarly placed petitioner was granted relief.

• It was held that cancellation of GST registration carries serious civil consequences and discretion exists to allow restoration in such cases upon compliance.

Judgement of the Court:

(Para 12–14)

• The petitioner was directed to approach the concerned authority within two months.

• Upon submission of all pending returns and payment of dues, the authority shall consider restoration of registration in accordance with the proviso to Rule 22(4).

• The period under Section 73(10) for assessment shall be computed from the date of the order (except for FY 2024–25).

• Petition disposed of without cost.

🧾 Between Fine Lines:

1. GST registration cancelled for non-filing can be restored if pending returns and dues are cleared.

2. Delay in seeking revocation due to genuine reasons may be condoned by judicial direction.

3. Rule 22(4)’s proviso offers a route for dropping cancellation proceedings if full compliance is achieved.

4. Civil consequences of cancellation were given due weight by the Court.

5. The taxpayer must act within two months to seek restoration.

Summary of Referred Cases:

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