Registration Cancellation Set Aside Subject to Filing Defaulted Returns and Paying Due Taxes Within Four Weeks

By | September 21, 2026
0 Comment
Registration Cancellation Set Aside Subject to Filing Defaulted Returns and Paying Due Taxes Within Four Weeks
Issue
Whether the cancellation of a GST registration for non-filing of returns for six months can be set aside and restored conditionally upon the assessee undertaking to file all pending returns and pay the outstanding tax, interest, fine, and penalty.
Facts
  • Default in Filing: The petitioner, a registered taxpayer under WBGST/CGST, defaulted in filing tax returns for a continuous period of six months.
  • Show Cause Notice: A Show Cause Notice (SCN) was issued proposing the cancellation of the petitioner’s GST registration.
  • Cancellation Order Passed: Due to the absence of a reply from the petitioner, an order dated November 4, 2025, was passed cancelling the GST registration.
  • Writ Petition Filed: The petitioner filed a writ petition challenging the cancellation order and offered an undertaking to file all pending returns and clear all tax liabilities, interest, fines, and penalties.
  • Department’s Contention: The State argued that adequate opportunity had been provided and that final tax liability could only be determined once the returns were formally submitted.
Decision
  • Revenue Interest Considered: The court noted that cancellation of registration for non-filing is counterproductive to revenue interests, as it prevents the taxpayer from issuing tax invoices and delays tax recovery.
  • Absence of Evasion Intent: There was no allegation that the petitioner engaged in dubious practices or intended to evade tax.
  • Pragmatic Approach Adopted: A pragmatic view was taken to enable the determination of final tax liability through the submission of defaulted returns.
  • Conditional Restoration Ordered: The cancellation order dated November 4, 2025, was set aside subject to the petitioner filing all pending returns and paying all dues within four weeks. Upon compliance, the registration will be restored; failing compliance, the writ petition will stand dismissed in favor of the assessee.
Key Takeaways
  • Revenue vs. Business Operations: Cancelling GST registration purely for return default harms both the assessee’s business operations and the Revenue’s ability to collect taxes through regular invoicing.
  • Conditional Relief for Compliant Taxpayers: Courts favor a pragmatic approach by restoring cancelled GST registrations if the taxpayer commits to clearing all backlogs, taxes, interest, and statutory penalties within a fixed timeline.
  • Time-Bound Compliance Required: Failure to adhere strictly to court-mandated timelines for filing pending returns and paying dues automatically revokes the relief granted and revives the cancellation order.
HIGH COURT OF CALCUTTA
Ajijul Haque @ Hoque
v.
State of West Bengal
Raja Basu Chowdhury, J.
WPA No.1964 of 2026
SEPTEMBER  7, 2026
Himangshu Kumar Ray, Subhasis Podder and Abhilash Mittal for the Petitioner. Jagiriti Mishra, Ld. AAAG and Ashoke Kumar Singhi for the Respondent.
JUDGMENT
1. Affidavit of service filed in Court today is retained with the record.
2. The present writ petition has been filed, inter alia, challenging the order of cancellation of registration of the petitioner under the WBGST/CGST Act, 2017.
3. It is the petitioner’s case that on 14th August, 2025 the petitioner was served with a notice of show cause as to why the registration of the petitioner under the said Act shall not be cancelled for the petitioner having failed to furnish his returns for a continuous period of six months.
4. Mr. Ray, learned advocate appearing for the petitioner submits that the petitioner was and is all along interested to comply with the provisions of the said Act by filing his returns. Unfortunately, such fact could not be brought to the notice of the respondents, as no reply to the show cause was filed. He submits that the petitioner is ready and willing to comply with the provisions of the said Act.
5. By placing reliance on a judgment of the Hon’ble Division Bench of this Court delivered in the case ofSubhakar Golder v. Asstt. Commissioner of State Tax [MAT 639 of 2024, dated 9-4-2024], it is submitted that in similar circumstances, similar order of cancellation of registration had been set aside, subject to the condition that the petitioner files returns for the entire period of default, pays requisite amount of tax and interest and fine and penalty. He submits that this Court may be pleased to set aside the order of cancellation and allow the petitioner file its returns.
6. Mr. Mishra, learned AAAG appearing for the State on the other hand submits that the petitioner had not complied with the statutory provisions and it is for such reason, the registration of the petitioner under the said Act was cancelled.
7. According to the respondent authorities the petitioner was given opportunity to show cause. Since, no reply to the show cause was given by the petitioner, the authorities had cancelled the registration. There is no irregularity on the part of the authorities in cancelling the registration.
8. Heard the learned advocates appearing for the respective parties and considered the materials on record.
9. 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 be able to carry on his business in the sense that no invoices 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 its business.
10. I find from the submissions made by the respondents that unless, the petitioner files his returns, the respondents cannot determine the final liability.
11. 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 4th November, 2025 cancelling the registration of the petitioner subject to the condition that the petitioner files its returns for the entire period of default and pays requisite amount of tax and interest and fine and penalty.
12. 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.
13. For the purpose of compliance of the above directions, the respondent are directed to activate the petitioner’s portal and login credentials within one week from the date so that the petitioner can file its returns, pays requisite amount of tax and interest and fine and penalty.
14. With the above observations and directions, the writ petition is disposed of without any order as to costs.
15. All parties shall act on the basis of the server copy of this order duly downloaded from the official website of this Court.