HC Grants Final Opportunity to Restore GST Registration Subject to Filing Returns and Undertaking.

Issue

Can a High Court, in its writ jurisdiction, grant a “final opportunity” to a taxpayer with a history of repeated non-compliance to have their GST registration restored, especially after their statutory appeal has been dismissed as time-barred?

Facts

The petitioner, a firm in petroleum retail, had a history of non-filing of GST returns and had faced multiple notices.
An earlier cancellation of their registration had been revoked, and the registration was restored on appeal.
The petitioner subsequently defaulted again, leading to a fresh notice and a new cancellation of their registration.
The statutory appeal filed against this new cancellation order was dismissed by the appellate authority as it was time-barred.
After the appeal’s dismissal, the petitioner deposited a substantial amount of the outstanding tax, interest, and late fees via challans.
The petitioner then filed a writ petition, seeking one final chance to file all pending returns and, upon full compliance, have their registration restored.

Decision

The High Court, noting that the petitioner had already deposited substantial dues, ruled in favour of the assessee.
It granted the petitioner a final window of eight weeks to file all pending GST returns.
This relief was made conditional upon the petitioner filing a formal undertaking to abide by all GST laws and to be regular in filing returns in the future.
The court included a default clause: if the petitioner fails to comply with the undertaking, the registration will stand cancelled automatically.
The GST department was directed to suspend the cancellation, examine the returns once filed, verify the payment of all dues, and (upon full compliance) revoke the cancellation order.

Key Takeaways

Demonstrating Bona Fides: Depositing a substantial portion of the outstanding tax dues before or during the writ hearing is a critical factor that demonstrates the taxpayer’s bona fides and persuades the court to grant equitable relief.
Writ Jurisdiction as a Final Recourse: A High Court can exercise its extraordinary writ jurisdiction to provide a final opportunity, even when statutory remedies (like an appeal) have been exhausted or are time-barred, to prevent the permanent closure of a business.
Conditional Relief: Such relief is not absolute. The court balanced the assessee’s request with the revenue’s interest by imposing strict conditions, including a formal undertaking for future compliance and an “automatic cancellation” clause as a deterrent.
Focus on Compliance, Not Punishment: The judgment prioritizes bringing the taxpayer into compliance (filing all returns and paying all dues) over the punitive measure of permanent cancellation, which would halt tax collection entirely.

HIGH COURT OF GUJARAT

Wadiwala Automobiles

State of Gujarat

BHARGAV D. KARIA and Pranav Trivedi, JJ.

R/SPECIAL CIVIL APPLICATION NO. 7016 of 2025

SEPTEMBER 26, 2025

Hiren J. Trivedi for the Petitioner. Ms Shrunjal Shah, AGP for the Respondent.

JUDGMENT

Bhargav D. Karia, J.- Heard learned advocate Mr. Hiren J. Trivedi for the petitioner and learned Assistant Government Pleader Ms. Shrunjal T. Shah for the respondent State.

2. Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.

3. Rule returnable forthwith. Learned Assistant Government Pleader Ms. Shrunjal Shah waives service of notice of rule on behalf of the respondent State.

4. By this petition under Article 226 of the India, the petitioner has prayed to quash and set aside the order passed by the appellate authority dated 03.01.2025, order dated 07.02.2024 cancelling the registration certificate of the petitioner and the show cause notice dated 3.11.2023.

5. Brief facts of the case are that the petitioner firm is engaged in retail business of High-Speed Diesel Oil, Petroleum Oils and other products.

5.1 The petitioner received the first show cause notice dated 24.06.2019 under Rule 22 of the GST Rules in Form GST REG-17 on the ground that the petitioner had not furnished returns of income for continuous six months.

5.2 Thereafter, the respondent authorities issued the order for cancellation of registration dated 03.07.2019.

5.3 The petitioner therefore, filed an application for revocation of cancellation of registration on 16.07.2019.

5.4 The respondent authorities passed the order dated 16.08.2019 for revocation of cancellation of registration of the petitioner.

5.5 Thereafter, the respondent authorities issued second show cause notice dated 05.01.2022 under Rule 22 of the GST Rules in Form GST REG-31 on the ground that the petitioner had not furnished return of income for continuous six months.

5.6 Thereafter the respondent authorities passed the order of cancellation of registration dated 10.02.2022 cancelling the registration of the petitioner.

5.7 The petitioner thereafter for restoration of GST registration, preferred an application for condonation of delay in preferring application for revocation of cancellation of registration.

5.8 The petitioner was thereafter vide show cause notice dated 17.05.2022 called upon to explain the delay caused in filing the application for revocation of cancellation of the registration.

5.9 It is the case of the petitioner that due to persistent medical impairment of the deposing partner, the reply to such show cause notice could not be submitted and therefore, the respondent authority passed the order dated 14.06.2022 rejecting the application for condonation of delay in filing the revocation application of cancellation of registration.

5.10 Being aggrieved, the petitioner preferred an appeal in Form GST APL-01 dated 09.07.2022.

5.11 It is the case of the petitioner that pursuant to appeal being preferred by the petitioner, the First Appellate Authority dropped the rejection of revocation of cancellation proceedings and restored the GST registration of the petitioner vide order dated 17.03.2023.

5.12 However, thereafter the petitioner received fourth show cause notice under Rule 22 of the GST Rules in Form GST REG-31 on the ground of non furnishing the return of income for continuous period of one month.

5.13 It is the case of the petitioner that the petitioner thereafter filed returns till March, 2023 which was accompanied with tax liability with applicable interest and late fees and the respondent authority therefore, passed the order for dropping the proceedings for cancellation of registration vide order dated 20.05.2023.

5.14 It is the case of the petitioner that thereafter the petitioner received yet another notice dated 25.08.2023 on the ground of non furnishing of the returns which proceedings were dropped vide order dated 28.08.2023.

5.15 Thereafter the petitioner received the impugned notice dated 3.11.2023 on the ground of non furnishing of the return of income under section 39 of the Act and the respondent authority passed the impugned order for cancellation of registration dated 07.02.2024 on the ground that the petitioner has failed to furnish the returns as per section 29(2) (c) of the GST Act for the prescribed period.

5.16 It is the case of the petitioner that the petitioner vide GST Challan dated 09.04.2024 and 10.05.2024 paid admissible tax interest and late fees.

5.17 It is the case of the petitioner that due to health issues of the deposing partner, the appeal against the impugned order was filed with delay on 01.07.2004.

5.18 The petitioner also vide GST Challan dated 03.09.2024 paid the admissible tax, interest and late fees.

5.19 However, the First Appellate Authority vide impugned order dated 03.01.2025 dismissed the appeal on the ground of delay in filing the appeal.

5.20 Being aggrieved, the petitioner has preferred the present petition.

6. Learned advocate Mr. Hiren J. Trivedi has filed an affidavit-in-rejoinder on behalf of the petitioner wherein it is averred that the petitioner is ready and willing to share all necessary details as may be sought for by the respondents and the petitioner firm undertakes to pay all the dues along with interest and late fees which would be determined in accordance with law by the respondents. It was also pointed out that the petitioner firm undertakes that henceforth the petitioner firm would comply with the provisions of law to file returns regularly and any infraction would lead to cancellation of GST registration.

7. Learned advocate Mr. Trivedi submitted that though the petitioner is a regular defaulter in filing the return, last opportunity may be given to the petitioner to mend it by payment of outstanding tax liability along with interest and late fees.

8. Learned advocate Mr. Trivedi also invited the attention of the Court on the following averments made in the memo of the petition:

“(13) It is further stated that with the intent for the discharging the applicable liability and revocation of the GSTIN; the petitioner paid the admissible tax, Interest and Late-Fees through two Challans dated 09.04.2024 and 10.05.2024.

Annexed hereto and marked “Annexure-U” is the copy of the challan dated 09.04.2024 and 10.05.2024. The details of the tax, interest and late-fees paid vide challans is tabulated as under:

DATE	TAX	INTEREST	LATE-FEES
09-04-2024	4,00,000.00
10-05-2024	79,860.00	45,200.00	66,000.00
Total	4,79,860.00	45,200.00	66,000.00

xxx

15. It is further stated, immediately after filing the appeal, the petitioner to establish its Bonafide, the petitioner paid the remaining amount of tax liability on 03.09.2024; with the intent that the to furnish the return and with the hope to seek the fair justice from the First Appellate Authority. Annexed hereto and marked “Annexure-W” is the copy of the challan dated 03.09.2024. The details of tax, interest and late fees paid vide challan dated 03.09.2024 is tabulated as under:

DATE	TAX	INTEREST	LATE-FEES
03-09-2024	1,51,104.00	37,000.00	28,000.00

9. It was therefore, submitted that the petitioner may be given a last opportunity to regularise his affairs by filing the pending returns under the provisions of the GST Act.

10. Learned Assistant Government Pleader Ms. Shrunjal Shah on the other hand submitted that if the petitioner is permitted to file the GST return as required under the provisions of the GST Act, the respondent authorities shall process the same and determine the tax liability in accordance with the provisions of the GST Act after considering the deposits made by the petitioner as stated here-in-above.

11. Learned advocate Mr. Trivedi for the petitioner submitted that if permitted, the petitioner shall be able to file the pending GST returns manually from June 2023 till date within a period of eight weeks from today.

12. Considering the above submissions, it appears that there is no other contentions raised on behalf of the petitioner as well as the respondents and in view of the fact that the petitioner has deposited substantial amount of outstanding tax with interest and late fees, as if returns would have been filed, in the interest of justice, the petitioner is permitted to file the pending returns within a period of eight weeks from today. The petitioner shall also file an undertaking before this Court that the petitioner shall abide by the provisions of the GST Act and the GST Rules and shall be regular in filing the returns in future, failing which, the registration of the petitioner shall be cancelled automatically.

13. The respondents are therefore, directed to consider the pending returns filed by the petitioner by suspending the order of cancellation of registration and if the same are found in accordance with law, call upon the petitioner to pay the outstanding dues, if any, forthwith. If the petitioner pays such outstanding dues as may be directed by the respondents, the order of cancellation shall stand revoked.

14. Petition is accordingly disposed of. Rule is made absolute to the aforesaid extent. No order as to costs.