Can a taxpayer whose GST registration was canceled due to non-filing of returns have their registration revoked?

Can a taxpayer whose GST registration was canceled due to non-filing of returns have their registration revoked?

Answer: Yes, a taxpayer whose GST registration was canceled due to non-filing of returns can have their registration revoked. To do so, the taxpayer must fulfill the following conditions:

1. File All Pending Returns: The taxpayer needs to file all the outstanding GST returns.
2. Pay Late Fees and Penalties: Any applicable late fees and penalties must be settled.
3. Apply for Revocation: The application for revocation must be submitted within six months i.e 180 days from the date of the cancellation order.

If the six-month period has expired, the taxpayer can still file an appeal within three months from the date of the cancellation order.

Relevant Case Law:

1. Raj Enterprises v. Superintendent: The court ruled that the mere non-filing of returns for a continuous period of six months was insufficient to justify the cancellation of registration, particularly for periods where returns were actually filed.
2. Kali Shankar Enterprises v. Additional Commissioner: It was held that cancellation of registration solely for filing nil returns continuously for over six months was invalid, as there was no provision in the GST Act or Rules for such a ground for cancellation.
3. Mohana Blue Metal v. Assistant Commissioner [2024]: The court restored the registration, noting that the non-filing of returns was due to the ill health of the managing partner responsible for the filings, which justified the revocation of cancellation.
4. Deepali Kapoor v. Avato Ward-63, State Goods & Services Tax [2024) Retrospective Cancellation was invalid for “failure to furnish returns for a continuous period of six months” merely because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant
5. M/S.Sri Ganesh Constructions vs The Assistant Commissioner (St) on 8 January, 2024 Registration was cancelled for non-filing of return and no one on behalf of the petitioner appeared against the show cause notice issued. The Court set aside the order and observed that most of the small scale entrepreneurs like carpenters, electricians, fabricators etc… are almost uneducated and they are not accustomed with handling of e-mails and other advance technologies. Though they are providing e-mail IDs at the time of Registration, the applications are prepared by some agents by creating an e-mail IDs, however, on reality most of the Traders are not accustomed with handling of e-mails. They are also not aware about the consequences of not paying the Returns in Time. The department shall workout the possibilities of issuing these notices in the respective regional languages and also by SMS and registered post. So that, the uneducated traders can also respond to these notices to some extent, otherwise, these notices will be an empty formality and will not serve any purpose for which it has been issued. The object of any Government is to promote the trade and not to curtail the same. The cancellation of registration certainly amounts to a capital punishment to the traders, like the petitioner.

In summary, the GST registration can be reinstated if the taxpayer complies with the necessary conditions and applies for revocation within the stipulated time frame.