Revocation of Cancelled Registration Requires Interest, Late Fee and Penalty Too: GSTAT Hyderabad

The Goods and Services Tax Appellate Tribunal, Hyderabad modified an appellate order restoring a registration, holding that Rule 23 also requires interest, late fee and penalty, and imposed a ₹10,000 penalty.

The Goods and Services Tax Appellate Tribunal (GSTAT), Hyderabad has held that revocation of a registration cancelled for non‑filing of returns requires payment not only of tax but also of interest, late fee and penalty, as the first proviso to Rule 23(1) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) provides [Md Qamaruddin Khan v. Sri Umamaheshwara Infratech, 2026-juristway.com-3400-GSTAT(Hyderabad)-GST].

A P Ravi, Member (Judicial), wrote the order for a Bench with Duvvuri Krishna Srinivas, Member (Technical), on the Revenue’s appeal under Section 112(3). The company’s registration was cancelled from 16 Aug 2020 for failure to file returns for six months. The First Appellate Authority restored it, noting that the returns had been filed, and directed the officer to verify the filing of returns and payment of tax. The company did not appear before the Tribunal despite several opportunities.

The Tribunal held that liability arising from the returns extends to interest, late fee and penalty, which are substantive obligations. By considering only tax and returns, the First Appellate Authority overlooked the proviso to Rule 23(1) and committed a jurisdictional and substantive error.

It added, however, that where the amounts are effectively admitted, the Department should use the recovery machinery under Section 79 of the Central Goods and Services Tax Act, 2017 (CGST Act), and must exhaust it before asking the Tribunal to aid collection.

Reading the appellate order as intending recovery of the amounts contemplated by Rule 23, the Tribunal held that the Department was at liberty to collect interest under Section 50 and late fee under Section 47 of the CGST Act. As Rule 23 also makes the taxpayer liable to a penalty, it imposed a penalty of ₹10,000.

The appellate order was modified to that extent, and the appeal was disposed of.

2026-juristway.com-3400-GSTAT(Hyderabad)-GST