HC Allows GST Registration Restoration After Assessee Deposits All Dues.

Issue

Can a taxpayer’s GST registration, which was cancelled by the department for non-filing of returns, be revoked and restored if the taxpayer subsequently deposits all self-assessed tax, interest, and late fees and expresses readiness to file the pending returns?

Facts

The petitioner had failed to file their GST returns for the period of March to May 2024.
The GST department consequently cancelled the petitioner’s GST registration.
Following the cancellation, the petitioner self-assessed their liability, computed the total dues, and deposited the full amount of tax, interest, and late fee into their Electronic Cash Ledger.
The petitioner then approached the court, expressing their readiness to file all the pending returns and seeking revocation of the cancellation.
The State (Revenue) did not oppose the petition and acknowledged that the self-assessed dues had been deposited.

Decision

The High Court ruled in favour of the assessee.
It held that since the outstanding dues (tax, interest, and late fee) had already been deposited, the petitioner was granted permission to file their pending GST returns.
The court ordered that upon the filing of these returns, the cancellation of the GST registration shall stand revoked.
The court also added a condition that if, upon filing, the department finds that the returns are not in accordance with the law or that any demand is still outstanding, the petitioner must pay such outstanding demand “forthwith.”

Key Takeaways

Compliance Over Punishment: The judgment prioritizes bringing the taxpayer into compliance over the punitive measure of permanent cancellation. The court’s primary goal is to ensure all returns are filed and all taxes are paid.
Payment of Dues is Key: The most critical fact that influenced the court’s decision was the petitioner’s bona fide action of depositing all self-assessed tax, interest, and late fees before seeking relief.
Restoration is Consequential: The revocation of the cancellation was made a direct and automatic consequence of the petitioner’s compliance (filing returns and paying all dues).
Writ Jurisdiction for Restoration: This case shows that a taxpayer can successfully approach a High Court under its writ jurisdiction to get their registration restored, even after cancellation, by demonstrating their willingness and action toward full compliance.

HIGH COURT OF GUJARAT

Abound It Services

State of Gujarat

A.S. Supehia and Pranav Trivedi, JJ.

R/SPECIAL CIVIL APPLICATION NO. 14354 of 2025

NOVEMBER 6, 2025

Abhay Y. Desai for the Petitioner. Ms. Shrunjal Shah, AGP for the Respondent.

ORDER

A.S. Supehia, J.- Heard learned advocate Mr. Abhay Y. Desai for the petitioner and learned Assistant Government Pleader Ms. Shrunjal Shah for the respondents.

2. Learned advocate Mr. Desai has filed an affidavit on behalf of the petitioner by placing on record a copy of the Electronic Cash Ledger to demonstrate that though the petitioner has not filed GST Returns for the period from March, 2024 to May, 2024, tax liability has been duly computed by the petitioner based on the available records and transactions, and such liability has already been discharged by way of depositing the same in Electronic Cash Ledger by the petitioner. The said affidavit is ordered to be taken on record.

3. The present petition is filed with the following prayers:

“(A) Your Lordships may be pleased to admit and allow the present Petition;

(B) Your Lordships may be pleased to isssue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction quashing and setting aside the impugned Order in Appeal dated 02.08.2025 passed by the learned Respondent no.3(Annexure-F), Show cause notice for Cancellation of Registration dated 03.07.2024 issued by the learned Respondent no.2(Annexure-B), as also the order for cancellation of registration dated 31.08.2024 passed by the learned Respondent no.2(Annexure- C) and thereby restore the registration of the petitioner w.e.f 29.02.2024;

(C) Pass any such order and/or further order that may be thought just and proper, in the facts and circumstances of the case.”

4. The basic contention of the petitioner is that the petitioner could not file GST returns for the prescribed period and as such the registration of the petitioner is cancelled by the respondents pursuant to the Show Cause Notice dated 03.07.2024 by order dated 31.08.2024 w.e.f. 29.02.2024 by invoking section 29(2)(c) of the GST Act, as the petitioner has not filed returns thereafter.

5. Learned advocate Mr. Desai has submitted that the petitioner is ready and willing to file GST returns as the petitioner has already deposited the requisite tax along with the interest through Electronic Cash Ledger as stated in the affidavit filed by the petitioner which can be verified by the respondent authorities.

6. Learned AGP Ms. Shah, on the other hand, submitted that if the petitioner is permitted to file the GST returns as required under section 29(2)(c) 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 and after considering the deposit made by the petitioner in the Electronic Cash Ledger, as stated in the affidavit filed.

7. Learned AGP Ms. Shah, under the instructions of Mr.Jay Baldevbhai Desai, STO-1 (I/C), Unit 68, Surat, has submitted that the petitioner has already deposited an amount of Rs.46,93,112/- through various challans in the Electronic Cash Ledger maintained on the GSTN Portal as per Section 49 of the Gujarat SGST Act, 2017 and Rule 87 of the Gujarat SGST Rules, 2017, which inter alia includes the tax dues i.e. of Rs.39,72,494/-, interest of Rs.5,26,632/- and late fees of Rs. 1,35,020/-towards self-assessment tax for the period from March, 2024 to June, 2025.

8. Considering the above submissions, and as there are no other contentions raised on behalf of the petitioner as well as the respondents, this Court is of the opinion that since the petitioner has already deposited the outstanding tax with interest, as if the returns would have been duly filed, in the interest of justice, the petitioner is permitted to file GST returns, as prayed for by the respondent authorities. If such GST return filing is found to be not in accordance with law, the petitioner shall pay forthwith any outstanding amount demand, if any, raised by the respondents. Upon such compliance, the order of cancellation of registration shall stands revoked.

9. With the aforesaid directions, the petition is accordingly disposed of. No order as to costs.