Gstr late filing fee

Assessee has not filed GSTR 3B for past 4-5 months as there was no business activity and he was planning to close down the business. Now he has received notice from department to file returns. Now will he have to file all returns before cancellation of registration or he can proceed otherwise? 

In case he has to file all returns, penalty is going to be huge. Is there a way out to avoid this.

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