Restoration of GST Registration Following Compliance and Payment

This significant ruling (February 2026) reinforces a balanced judicial approach: while non-filing of returns for six months is a valid ground for cancellation, it is a curable procedural default. The Gauhati High Court emphasized that the GST law aims for revenue collection and compliance, not the permanent extinction of a business.

The Legal Issue

Can a GST registration cancelled under Section 29(2)(c) for non-filing of returns be restored if the taxpayer is ready to comply with all past defaults, even if the statutory time limit for seeking revocation has expired?

Facts of the Case

The Cancellation: The petitioner, a partnership firm, had its GST registration cancelled by the proper officer because it failed to furnish returns for a continuous period of six months or more.
The Petitioner’s Stand: The firm invoked the proviso to Rule 22(4), expressing a willingness to file all pending returns and discharge the entire tax liability, including interest and late fees.
Revenue’s Objection: The Department opposed the restoration, primarily citing the delay in approaching the authorities and the expiry of the standard window for revocation.

The Decision: Restoration through Compliance

The Court ruled in favour of the assessee, directing the authorities to reconsider the restoration:

Rule 22(4) as a Remedial Measure: The Court highlighted that the proviso to Rule 22(4) specifically empowers the proper officer to drop cancellation proceedings if the taxpayer furnishes all pending returns and pays full dues (tax + interest + late fee).
Order in Form GST REG-20: Once compliance is met, the proper officer is required to pass an order in FORM GST REG-20 to formally drop the proceedings and reactivate the registration.
Serious Civil Consequences: The Court noted that cancellation of registration is a “death knell” for a business, as it prevents legal operations and breaks the Input Tax Credit (ITC) chain. Therefore, a final opportunity for regularization must be granted to genuine taxpayers.
Direction: The petitioner was directed to approach the competent authority within two months. Upon full compliance (filing all back-dated returns and clearing all financial dues), the authority must restore the registration expeditiously.

Key Takeaways for Taxpayers

The Compliance Shield: If your registration is cancelled for non-filing, your best defense is immediate compliance. Paying the dues and filing the returns effectively “cures” the reason for cancellation under the law.
Writ Jurisdiction vs. Portal Limits: Even if the GST portal displays a “Time Expired” message for revocation, High Courts have the power to intervene if the taxpayer demonstrates a bona fide intent to pay and comply.
REG-20 is the Goal: Ensure that after you comply, you follow up for the issuance of Form GST REG-20, which officially restores your status to “Active.”

Summary of the Restoration Pathway

Step 1: Calculate the total liability (Tax + Interest + Late Fees) for the entire default period.
Step 2: Pay the amount and file all pending GSTR-3B/GSTR-1 returns.
Step 3: File a formal application for restoration/revocation citing the proviso to Rule 22(4).
Step 4: Upon satisfaction of the Proper Officer, an order in FORM GST REG-20 is issued to drop the cancellation.

HIGH COURT OF GAUHATI

Deepak Construction Co.

State of Assam^*

Sanjay Kumar Medhi, J.

WP (C) No. 984 of 2026

FEBRUARY 27, 2026

Amit Goyal and A. Choudhury, Advs. for the Petitioner. B. Gogoi, Ld. Standing Counsel for the Respondent.

ORDER

1. Heard Shri A. Goyal, learned counsel for the petitioner and Shri B. Gogoi, learned Standing Counsel, Finance & Taxation for the respondent nos. 1, 2, 3 and 4.

2. It is the case of the petitioner that it has been carrying out its partnership business under the name & style, “M/S Deepak Construction” as the sole partner. It is an Assesee registered under the Central Goods and Services Tax (CGST) Act, 2017/Assam Goods and Services Tax (AGST) Act, 2017 bearing registration No. 118AADFD3069R1ZV. On the reason of non-filing of GST returns for a continuous period of six months, the petitioner was served with a show cause notice bearing reference No.ZA180424006216V, dated 05.04.2024 asking it to furnish reply to the aforesaid notice within a period of 30 (thirty) days from the date of service of notice and it was mentioned in the aforesaid show cause notice that if the petitioner fails to furnish a reply within the stipulated date or fails to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of the available records and on merits. Thereafter, the impugned order dated 21.07.2024 was passed by the Deputy Commissioner of State Tax, Tinsukia-7 whereby the petitioner’s GST registration has been cancelled for not furnishing returns for a continuous period of 6 (six) or more months.

3. The learned counsel for the petitioner submits that due to non-conversant of online procedure, he could not visit the GST portal and accordingly could not submit any reply to the said show cause notice in time. It is further contended that when the petitioner came across the said notice, the time for filing reply and attending the hearing was already over and order had also been uploaded in the portal.

4. Being aggrieved, the petitioner has approached this Court by filing the present writ petition.

5. Shri Goyal, learned counsel for the petitioner has submitted that the petitioner is ready and willing to comply with all the formalities required as per proviso to subrule (4) of Rule 22 of the CGST Rules, 2017.

6. 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. The said Rule is extracted herein below:

“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 Rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule

(1), (or under sub-rule (2A) of Rule 21A) cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under subsection (5) of Section 29.

(4) Where the reply furnished under sub-rule (2) (or in response to the notice issued under sub-rule (2A) of Rule 21A) is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20 : Provided that where the person instead of replying to the notice served under sub rule (1) for contravention of the provisions contained in Clause (b) or Clause (c) of sub-section (2) of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20. (5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself.”

7. It is discernible from a reading of the proviso to sub-rule (4) of Rule 22 of the CGST Rules 2017 that if a person, who has been served with a show cause notice under Section 29(2)(c) of the CGST Act, 2017, is ready and willing to furnish all the pending returns and to make full payment of the tax itself along with applicable interest and late fee, the officer, duly empowered, can drop the proceedings and pass an order in the prescribed Form i.e. Form GST REG-20.

8. The learned counsel for the petitioner has also referred to an order dated 23.02.2026 passed in Mahendra Gurung v. State of Assam [WP(C) No. 900/2026] wherein the petitioner therein was similarly situated like the present petitioner. Shri Gogoi, learned Standing Counsel has, however, raised an objection on the ground of delay and has submitted that though the petitioner is relying upon the aforesaid order dated 23.02.2026, the present order may not be treated to be a precedent.

9. Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 (six) months or more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, has the authority and jurisdiction to drop the proceedings and pass an order in the prescribed Form.

10. In such view of the matter, this writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of 2 (two) months from today seeking restoration of her GST registration. If the petitioner submits such an application and complies with all the requirements as provided in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, the concerned authority shall consider the application of the petitioner for restoration of the GST registration and passed necessary orders in accordance with law. The aforesaid process be completed expeditiously and preferably within an outer limit of 60 days from the date of receipt of the certified copy of this order.

11. It is needless to say that the period as stipulated under Section 73 (10) of the Central GST Act/State GST Act shall be computed from the date of the instant order, except for the financial year 2025-26, which shall be as per Section 44 of the Central GST Act/State GST Act. The petitioner herein also be liable to make payment of arrears i.e. tax, penalty, interest and late fees.

12. The writ petition accordingly stands disposed of.

13. It is made clear that the present order may not be treated to be a precedent.