Cancellation of GST Registration Revoked on Filing of Pending Returns and Payment of Dues

Issue: Whether the cancellation of GST registration for non-filing of returns can be revoked if the assessee subsequently files the pending returns and pays the outstanding taxes, interest, and penalty.

Facts:

The assessee’s GST registration was cancelled for non-filing of returns.
A show cause notice was issued, followed by an order cancelling the registration.
The assessee’s appeal under Section 107 of the GST Act was rejected.

Decision:

The court referred to the decision in Rana Chowdhury Vs. State of West Bengal and held that the cancellation order could be revoked.
The court set aside the impugned orders, subject to the assessee fulfilling certain conditions:
- Filing returns for the entire default period.
- Paying the requisite tax, interest, and penalty within four weeks.
Upon fulfilling these conditions, the assessee’s GST registration would be restored.

Key Takeaways:

This case reaffirms the principle established in Rana Chowdhury Vs. State of West Bengal that cancellation of GST registration can be revoked if the assessee rectifies the default by filing pending returns and paying outstanding dues.
This decision provides relief to taxpayers who may have faced genuine difficulties in filing returns on time, allowing them to regain their registration and continue their business operations.
It emphasizes the importance of compliance with GST regulations and encourages taxpayers to rectify any defaults to avoid the adverse consequences of cancellation.

HIGH COURT OF CALCUTTA

C.P. George

State of West Bengal

Aniruddha Roy, J.

W.P.A. No. 70 of 2025

JANUARY 22, 2025

Himangshu Kumar Ray and Abhilash Mittal for the Petitioner. Hirak Barman and Ms. Rima Sarkar for the Respondent.

ORDER

1. Affidavit-of-service, filed in court today, is taken on record.

2. Mr. Himangshu Kumar Ray, learned Advocate appears for the petitioners.

3. Mr. Hirak Barman, learned Additional Government Pleader, appears for the State.

4. Referring to a show cause notice dated November 29, 2021 annexure P-2 at page 52 to the writ petition, the petitioners submit that the show cause notice was served for cancellation of GST registration of the petitioners on the sole plea that the petitioners did not file its return in accordance with law for consecutive six months.

5. The petitioners have filed an appeal under Section 107 of the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017.

6. The issue has already received the attention of the Hon’ble Division Bench in the matter of Subhankar Golder v. Assistant Commissioner of State Tax reported at (Calcutta). The Hon’ble Division Bench had observed as under:

“3. After elaborately hearing learned counsel for the respective parties, we are of the view that the appellant can be provided with one more opportunity to remedy the bridge as the appellant being an individual since a small retailer of imitation jewellery, we deem it appropriate that the appellant should be permitted to remedy the bridge.

4. Accordingly, the appeal, the connected application and the writ petition all are allowed and the order of cancellation of registration is set aside subject to the condition that the appellant files returns for the entire period of default, pays requisite amount of tax and interest and fine and penalty. If the appellant complies with the directions passed within a period of three weeks from the date of receipt of the server copy of this order, the appellant’s registration under the Act shall be restored by the Jurisdictional Officer. However, if the appellant fails to comply with the directions, the benefit of this order would not enure to the appellant and the writ petition would stand automatically dismissed.

5. For the purpose of the compliance of the above directions, the respondents are directed to open the portal so that the returns can be filed and the tax, interest, penalty and fine can be remitted by the appellant.”

7. Following the above, dictum of the Hon’ble Division Bench, a co-ordinate bench in the matter of Rana Chowdhury v. State of West Bengal reported a GST 45/87 GSTL 209 (Calcutta) had observed as under:

“8. Admittedly, I find that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adopting 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.

9. I find from the submissions made by the respondents that unless, the petitioner files his returns the respondents cannot determine the final liability.

10. Having regard to the aforesaid and taking note of the direction issued by the Hon’ble Division Bench of this court in the case of Subhankar Golder (supra), I propose to set aside the order dated 4^th February, 2022 cancelling the registration of the petitioner subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax and interest and fine and penalty.

11. 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. 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.

12. For the purpose of compliance of the above directions, the respondents are directed to open the portal within one week from date, so that the petitioner can file his returns, pays requisite amount of tax and interest and fine and penalty.”

8. In view of the above, the show cause notice dated November 29, 2021 at page 52 to the writ petition, the order of cancellation of GST registration dated January 27, 2022 at page 59 to the writ petition and the order of the appellate authority dated December 24, 2024 at page 80 to the writ petition stand set aside and quashed subject to petitioner files his GST returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty and/or late fees within four weeks from date.

9. Subject to fulfilment of the above conditions by the petitioners the GST registration of the petitioners shall be restored by the jurisdictional officer. However, if the petitioner fails to comply with the direction and fulfil the conditions as above, the benefit of this order will not enure to the petitioners and the writ petition would stand automatically dismissed, without any further reference to this court. Consequently, the cancellation of the GST registration would be restored and effected with an immediate effect.

10. For the purpose of compliance of above directions, the respondent authorities shall open the portal within one week from date to enable the petitioners to file the returns, pay the requisite amount of tax, interest, fine and penalty and/or late fees.

11. Since affidavits are not called for, the allegations made in the writ petition are deemed not to have been admitted by the respondents.

12. With the above observations and directions this writ petition, WPA 70 of 2025 stands disposed of, without any order as to costs.