Facts of the Case: In this case, petitioner was issued a show cause notice under Section 29(2)(c) of the Act for non-filing of returns for a continuous period of six months. The notice required a reply within 30 days but did not mention a date of personal hearing. Since the petitioner, being unfamiliar with online procedures, could not file a reply, the passed an order on 22.03.2023 cancelling the GST registration without assigning reasons. The petitioner’s appeal was dismissed on 09.10.2025.

Subsequently, the petitioner filed all pending GST returns up to March 2023, along with payment of tax dues, interest, and late fees. However, when attempting to apply for revocation of cancellation, the GST portal displayed a message that the 270-day period for filing revocation application had expired. Aggrieved, the petitioner filed the present writ petition seeking restoration of registration.

Issue:

Whether the petitioner’s GST registration, cancelled under Section 29(2)(c) for non-filing of returns, can be restored upon fulfillment of conditions prescribed under the proviso to Rule 22(4) of the CGST Rules, 2017.

Held that:

The Court observed that Rule 22 of the CGST Rules, 2017 prescribes the procedure for cancellation of registration. Under sub-rule (4), if the proper officer finds the reply to the show cause notice satisfactory, he may drop the proceedings and pass an order in FORM GST REG-20. The proviso to Rule 22(4) further provides that where a registered person, instead of replying to the show cause notice, furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fees, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20.

The Court noted that cancellation of GST registration entails severe civil consequences, as it disables the taxpayer from conducting business legally. Therefore, the provision contained in the proviso to Rule 22(4) is a remedial measure, permitting taxpayers to regularize past non-compliance by paying dues and filing returns rather than suffering permanent cancellation.

The Court relied upon its earlier decision in Sanjoy Nath v. Union of India and Others, WP(C) No. 6366/2023, decided on 11.10.2023, where it had held that the proper officer is empowered to consider restoration of registration upon fulfillment of the conditions prescribed under Rule 22(4).

Accordingly, the Court directed that the petitioners shall approach the proper officer within two months from the date of the order seeking restoration of their GST registration. If the petitioners furnish all pending returns and make full payment of tax dues, interest, and late fees, as envisaged under the proviso to Rule 22(4), the officer shall consider restoration of the registration in accordance with law and pass appropriate orders expeditiously.

Case Name: Dhirghat Hardware Stores And Anr, Mainur Islam Versus The Union of India, The Commissioner (Appeals) Central Goods And Service Tax Guwahati, The Assistant Commissioner Central Goods And Service Tax Dhubri-1, The Superintendent Central Goods And Service Tax Dhubri-1. dated 17.10.2025. 

To read the complete judgement 2025 Taxo.online 2646