GST Registration Cancellation: Gauhati HC Directs Department to Drop Proceedings if Taxpayer Furnishes Returns and Pays All Dues [Read Order]

Gauhati HC: GST Registration Cancellation Proceedings to be Dropped Upon Full Compliance

In a significant ruling offering relief to taxpayers, the Gauhati High Court has directed the GST department to cease cancellation proceedings against businesses if they furnish all pending Goods and Services Tax (GST) returns and settle all outstanding dues. This decision underscores the importance of compliance and provides a clear pathway for businesses to rectify past lapses.

Court’s Interpretation of GST Rules

The High Court’s ruling centers around Rule 22(4) of the CGST Rules, 2017, in conjunction with Section 29(2)(c) of the CGST Act. The court emphasized that these provisions mandate the empowered GST officer to terminate cancellation proceedings if the taxpayer demonstrates full compliance.

Specifically, the taxpayer must:

• Furnish all pending GST returns for the relevant period.
• Pay all outstanding dues, including taxes, interest, and any applicable late fees.

Impact on Taxpayers

This order provides a crucial opportunity for businesses facing GST registration cancellation to regularize their status. By diligently fulfilling their outstanding obligations, they can avoid the detrimental consequences of cancellation, which can include the inability to conduct business legally and potential disruptions to their operations.

What Businesses Need to Do

To benefit from this ruling, businesses must take immediate action:

• Assess Outstanding Dues: Accurately determine the total amount owed, including taxes, interest, and late fees.
• File Pending Returns: Ensure all required GST returns are filed promptly.
• Make Payment: Clear all outstanding payments through the appropriate channels.
• Document Compliance: Keep detailed records of all returns filed and payments made as proof of compliance.