Uttarakhand High Court Allows Proprietorship Firm to Seek Revocation of GST Registration Cancellation Due to Non-Filing of GST Returns for Six Months, Affirms Right to Make Payment of Outstanding Dues

Court’s Decision:

The Uttarakhand High Court directed that the petitioner is permitted to file an application under Section 30(2) of the Central Goods and Service Tax Act, 2017 (CGST Act), for the revocation of the cancellation of its GST registration. The court stated that if the petitioner furnishes all pending GST returns and deposits the outstanding dues within two weeks, the Competent Authority shall consider the application and pass an appropriate order within four weeks in accordance with the law.

Facts:

• The petitioner, a proprietorship firm operating under the name ‘Kiran Enterprises,’ deals with works contracts and is registered under the CGST Act, 2017.
• The GST registration of the petitioner was canceled by Respondent No.2 on January 15, 2024, due to non-filing of GST returns for a continuous period of six months.
• The petitioner contended that it is now ready to pay the pending GST returns and any penalty imposed by the department.
• The petitioner filed the current writ petition seeking to quash the cancellation order and allow it to file an application under Section 30 of the CGST Act for revocation of the cancellation.

Issues:

• Whether the cancellation of GST registration due to non-filing of GST returns for six months can be revoked when the taxpayer is willing to comply with all outstanding requirements.

Petitioner’s Arguments:

• The petitioner argued that it is now willing to make the necessary payments towards GST returns and any associated penalties to regularize the default.
• The petitioner submitted that an identical matter had been decided by the court in WPMS No. 2285 of 2024, where the court permitted revocation of cancellation upon payment of dues.

Respondent’s Arguments:

• The respondents did not oppose the submissions made by the petitioner and agreed that the case is covered by the earlier order in WPMS No. 2285 of 2024.

Analysis of the Law:

• Section 30(2) of the CGST Act, 2017 provides for revocation of the cancellation of registration if the registered person makes an application and complies with all pending requirements.
• The court examined the applicability of this provision and the precedent cited by the petitioner, concluding that the petitioner’s application should be considered if it meets the statutory requirements.

Precedent Analysis:

• The court relied on its earlier decision in WPMS No. 2285 of 2024, where a similar relief was granted. The precedent established that cancellation of registration could be revoked if the taxpayer complies with outstanding obligations.

Court’s Reasoning:

• The court noted the consensus between both parties and found no reason to deny the petitioner’s request. It emphasized that if the petitioner furnishes all GST returns and deposits the outstanding dues within the stipulated period, it is entitled to file an application under Section 30(2).
• The court directed the Competent Authority to consider and decide on the petitioner’s application in accordance with the law within four weeks.

Conclusion:

The High Court disposed of the petition, granting the petitioner the liberty to file an application for revocation of the cancellation of its GST registration. It also directed the petitioner to furnish all pending GST returns and deposit the outstanding dues within two weeks, following which the Competent Authority must pass an appropriate order within four weeks.

Implications:

The decision reaffirms that taxpayers willing to rectify defaults and comply with legal requirements can seek revocation of GST registration cancellations under Section 30(2) of the CGST Act. The order ensures that businesses get an opportunity to restore their registration status by fulfilling statutory obligations.

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