• Dated 18^th July, 2025

Gauhati HC Allows Revocation of GST Registration Upon Filing of Returns and Payment of Dues

Brief Facts:

The petitioner, GST registration was cancelled by the tax department (Itanagar Zone-II) for non-filing of returns. A Show Cause Notice dated 13.09.2022 was issued, directing the petitioner to explain why their registration should not be cancelled based on "auto-generated details of inward supplies". Despite instructions to file returns and appear before the authorities on 20.09.2022, there was no compliance, leading to cancellation of registration effective from 13.09.2022.

Appellant's Contention:

The petitioner contended and relied upon a prior judgement of the same Hon'ble Court in the case of W.G. Resorts (Assam) Pvt. Ltd. v. Union of India [WP (C) No. 6232 of 2022, dated 29-9-2022], which dealt with similar facts and had granted relief in favour of the assessee. The petitioner further submitted that they had complied with the requirements under Rule 23 of the CGST Rules, 2017 by filing pending returns and paying all due taxes and statutory liabilities up to the date of cancellation.

Respondent's Contention:

The state's counsel acknowledged that the W.G. Resorts decision indeed covered the issue but pointed out a factual distinction—that in the present case, the petitioner did not respond to the Show Cause Notice nor file returns prior to cancellation, as reflected in the records.

Held:

The Gauhati High Court held that if the petitioner had complied with the filing of returns and payment of statutory dues as required under Rule 23 of the GST Rules, the registration was liable to be restored. The Court observed that the precedent in W.G. Resorts applied to the petitioner's case. Accordingly, the writ petition was disposed of with directions to the department to revoke the cancellation on the petitioner's compliance with filing and payment obligations. The revocation was to be done within 25 days, and the department was instructed to communicate the outstanding dues to the petitioner promptly.

Our Comments:

This judgment reiterates the principle that GST registration, once cancelled for non-filing of returns, can be restored provided the taxpayer complies with return filing and payment of dues as per Rule 23 of the CGST Rules, 2017. The Court's liberal view, grounded in prior precedent, reflects a taxpayer-friendly interpretation aimed at allowing compliant businesses to regularize their position. Taxpayers should treat Show Cause Notices with utmost seriousness and ensure timely action to avoid litigation and disruption of business. This case reinforces the possibility of remedy even post-cancellation, but the compliance must be prompt and demonstrable.

Reference: M/s SMTI GICHAK DANIAM Versus State of AP [W.P.(C) No. 182 of 2025, decided on 30-6-2025]

Author: Siddharth Kumar Shaw

Edited by: Shaily Gupta