IMPORTANT POINT
Cancellation of GST registration under Section 29(2)(c) can be contested if the petitioner is willing to comply with filing requirements and pay dues.

ORDER :

MANISH CHOUDHURY, J.

Heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. S.C. Keyal, learned Standing Counsel, CGST for all the respondents.

2. It is the case of the petitioner that he is the sole proprietor of a firm by the name, M/s Saffron Restaurant and he got himself registered as a dealer under the Central Goods and Services Tax Act, 2017 . When he applied for registration, the petitioner was issued a registration certificate in Form GST REG-06 with Registration no. 18AYBPS4596C3Z3 and GSTIN no. 18AYBPS4596C3Z3 w.e.f. 17.05.2018.

2.1. The petitioner was issued a show cause notice on 05.09.2023 asking him to show cause as to why the registration certificate issued under the Central Goods and Services Tax [CGST] Act, 2017 in his favour should not be cancelled due to non-furnishing of returns in terms of Section 39 of the CGST Act, 2017 for a continuous period of 6 [six] or more months. The petitioner was, thereby, directed to furnish his reply within a period of 30 [thirty] days from the date of service of the said show cause notice and was also asked to appear in person before the authority issuing the show cause notice on 03.10.2023. Thereafter, the impugned order dated 21.11.2023 came to be passed whereby the petitioner’s GST registration has been cancelled under Section 29[2][c] of the CGST Act, 2017 read with Rule 22 of the CGST Rules, 2017 for not furnishing returns for a continuous period of 6 [six] or more months.

2.2. The petitioner has averred that as the show cause notice was uploaded in the common portal, the petitioner despite exercise of his diligence, failed to notice the fact of uploading of the show cause notice in the common portal and as a result, he could not submit any reply to the show cause notice dated 05.09.2023.

3. Section 39[1] of the CGST Act, 2017 inter alia requires a registered person to furnish a return for every calendar month or part thereof, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed.

4. Mr. Mishra, learned counsel appearing for the petitioner has submitted that due to reasons beyond his control, the petitioner could not submit the returns required to be submitted under Section 39[1] of the CGST Act, 2017 for a period of about 6 [six] months or more. He has, however, submitted that the petitioner is ready and willing to comply with all the formalities required as per proviso to sub-rule [4] of Rule 22 of the CGST Rules, 2017.

5. As per Section 29[2][c], an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 [six] months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration. For ready reference, Rule 22 of the CGST Rules, 2017 is quoted herein below in its entirety :-

Rule 22 : Cancellation of Registration

[1] Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.

[2] The reply to the show cause notice issued under sub-rule [1] shall be furnished in FORM REG-18 within the period specified in the said sub-rule.

[3] Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under Rul