Restoration of GST Registration: Pragmatic Approach vs. Non-Filing of Returns

Facts

The Parties: The petitioner was a registered person under the WBGST/CGST Act.
The Trigger: The Proper Officer issued an order dated 27 May 2023, cancelling the petitioner’s GST registration on the grounds of continuous non-filing of returns.
The Appeal: The Appellate Authority confirmed this cancellation via an order dated 15 October 2024.
The Dispute: The petitioner approached the High Court through writ jurisdiction, seeking restoration of the registration to resume business operations.
Revenue’s Stand: The cancellation was based on statutory non-compliance (non-filing), which is a valid ground under Section 29 of the Act.

Decision

Final Verdict: In favour of the Assessee (Registration restored subject to conditions).
Ratio Decidendi:
- Revenue’s Interest: The Court observed that the suspension or cancellation of registration for a long duration is counterproductive to the interest of the Revenue. Without a valid GSTIN, a taxpayer cannot issue invoices or conduct business, which ultimately stops the collection of tax.
- Nature of Default: The Court noted that the cancellation rested solely on the failure to file returns. There were no allegations of fraud, evasion, or the adoption of “dubious processes” by the petitioner.
- Pragmatic Approach: A business should be permitted to operate so that it can pay its dues. The Court set aside both the cancellation and the appellate orders, provided the petitioner files all pending returns and pays the full amount of tax, interest, fine, and penalty within a specified timeframe.

Key Takeaways

Restoration via Writ: This ruling reinforces that High Courts are generally inclined to restore registrations if the default is purely procedural (non-filing) and not rooted in fraudulent intent.
Cost of Compliance: While restoration is possible, the taxpayer must be prepared to clear the entire backlog of tax and significant late fees/penalties. It is a “conditional” relief, not an unconditional waiver.
Business Continuity: Professionals can use this precedent to argue that “shutting down a business” via cancellation should be a last resort. For pending assessments or restoration applications, emphasizing the “lack of dubious processes” and “intent to comply” can be a strong defense.
Timely Action: Although the court provided relief, the delay from 2023 to late 2024 shows the heavy litigation cost and business disruption caused by non-filing. Regular compliance remains the most cost-effective strategy.

HIGH COURT OF CALCUTTA

National Security Service

State of West Bengal^*

Raja Basu Chowdhury, J.

WPA No. 502 of 2026

APRIL 6, 2026

Bikramaditya Ghosh, Rajeev Parik, Mayank Bhandari, Ms. Ved Rai, Debojyoti Basak and Vivek Saha for the Petitioner. Pretom Das and Pradip Sarkar for the Respondent.

ORDER

1. Affidavit of service filed in Court is taken on record.

2. The matter pertains to, in effect, challenge to an order of cancellation of registration under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as the said Act) dated 27^th May, 2023.

3. Although the learned advocate for the respondent has placed before this Court a Public Notice dated 23^rd March, 2026 and would submit that the Appellate Tribunal has already been set up, the parties are ad idem on the issue that judicial proceeding (hearing) before the Tribunal is yet to commence.

4. Noting in absence of the petitioner’s registration, the petitioner is unable to carry on any business, this Court proposes to take up the hearing of this matter.

5. Heard the learned advocates appearing for the respective parties and considered the materials on record. Admittedly, I find that the petitioner’s registration under the said Act had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adapting dubious process to evade tax. Taking note of the fact that the suspension/revocation of license would be counterproductive and works against the interest of the revenue since, the petitioner in such a case would not able to carry on his business in the sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, I am of the view that the respondents should take a pragmatic view in the matter and permit the petitioner to carry on his business.

6. Accordingly, having regard to the direction issued by the Hon’ble Division Bench of this Court in the case of Subhankar Golder v. Asstt. CST (Cal)/MAT 639 of 2024 on 9th April, 2024, I propose to set aside the order dated 27th May 2023, cancelling the registration of the petitioner under the said Act, subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty, if not already paid.

7. It is made clear that if the petitioner complies with the directions/conditions noted above, within 4 weeks from the date of receipt of the server copy of this order, the petitioner’s registration under the said Act shall be restored by the Jurisdictional Officer under the said Act. However, if the petitioner fails to comply with the directions as aforesaid, the benefit of this order will not enure to the petitioner and the writ petition would stand automatically dismissed.

8. For the purpose of compliance of the above directions, the respondents are directed to activate the portal within one week from the date of communication of this order, so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty if not already paid.

9. As a sequel thereto, the order dated 15^th October, 2024 passed by the appellate authority also stands set aside.

10. Since, no affidavit-in-opposition has been called for, the allegations made in the writ petition are deemed not to have been admitted by the respondents.

11. With the above observations and directions, the writ petition stands disposed of.

12. Urgent photostat certified copy of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.