GST Registration Can Be Restored If Dues Are Paid and Returns Filed says Gauhati High Court

Legal Background & Court Observation:

The Gauhati High Court ruled that restoration of a cancelled GST registration is permissible if the taxpayer:

Furnishes all pending GST returns, and
Pays all tax dues along with applicable interest and late fees.

This is rooted in:

Section 29(2)(c) of the CGST Act, 2017 — which permits cancellation of registration for not filing returns for a continuous period of 6 months.
Rule 22(4), proviso, of the CGST Rules, 2017 — which states that if a person (who has been served a show cause notice under Section 29(2)(c)) is ready to comply fully (filing returns and payment of taxes + interest + late fee), the proper officer may drop the cancellation proceedings by passing an order in Form GST REG-20.

Reference:

Section 29(2)(c) of the CGST Act, 2017
Rule 22(4) Proviso of the CGST Rules, 2017

Case Facts and Arguments:

The petitioner (proprietor of “M/s Aruhan Enterprise”) failed to file returns for 6+ months and was served a show cause notice under Rule 22.
She did not respond in time, claiming lack of knowledge of online procedures and health impacts from COVID-19.
The Assistant Commissioner of State Tax passed an ex-parte cancellation order.
After recovering, she:
- Filed all pending returns up to May 2023.
- Paid entire GST liability with interest and late fees.
She approached the High Court for restoration of her registration.

Court’s Findings:

The Hon’ble High Court held that:

Cancellation of GST registration has serious civil consequences.
The law (Rule 22(4) proviso) clearly permits restoration if the taxpayer clears all dues and complies with filing obligations.
Hence, the petitioner is entitled to seek restoration by approaching the competent authority.

Direction:
The petitioner was directed to approach the proper officer within two months, and the officer shall consider her application under the provisions of Rule 22(4) and pass appropriate orders.

Key Takeaway:

A taxpayer whose GST registration has been cancelled due to non-filing of returns under Section 29(2)(c) can get their registration restored if:

All returns are filed,
All dues (tax, interest, late fees) are paid,
And an application is made to the proper officer under Rule 22(4) along with FORM GST REG-20.

This relief underscores the principle of substantive compliance over procedural lapses.

Case Title: Shahima Khatun v. The State of Assam & Ors.

Case Number: WP(C)/3300/2025

Counsel for Petitioner/ Assessee: A K Gupta, R K Mahanta and M Nirola and R S Mishra