Calcutta HC Restores GST Registration Cancelled for Non-Filing of Returns for Six Months, Grants Taxpayer One More Opportunity [Read Order]

In a recent ruling, the Calcutta High Court restored a Goods and Services Tax (GST) registration that was cancelled for non-filing of returns for six months and granted the taxpayer one more opportunity to regularise the defaults subject to filing pending returns and payment of all statutory dues.

Peul Enterprise filed a writ petition challenging the order passed by the Appellate Authority under Section 107 of the CGST Act, 2017/WBGST Act, 2017 by which its appeal against the cancellation order dated March 14, 2023 was dismissed.

The petitioner’s GST registration had been cancelled on the ground that it failed to furnish returns for a continuous period of six months.

Before the High Court, counsel for the petitioner argued that the petitioner is willing to continue its business and is ready to file returns for the entire period of default. The counsel also submitted that the petitioner is prepared to pay all taxes, costs, charges, late fees, penalty and interest applicable for restoration of the registration.

Justice Om Narayan Rai observed that the registration was cancelled only on the ground of failure to furnish returns for six months. The court observed that it was not the case of the revenue that the petitioner was involved in any fraudulent transaction, tax evasion, suppression of facts, or any dubious activity. There was also no such allegation in the show cause notice or finding in the cancellation order.

The court observed that if the GST registration is not restored, it would not only adversely affect the petitioner but would also cause loss of revenue to the State. Taking guidance from the Division Bench judgment in Subhankar Golder v. Assistant Commissioner of State Tax, the court decided to grant the petitioner one more opportunity to get its registration restored.

The court set aside the order and directed that the cancellation of registration would stand set aside subject to the condition that the petitioner shall file returns for the entire period of default and pay all taxes, costs, charges, interest, fine, penalty and late fees within four weeks from the date of the order.

The court further directed that upon such compliance, the petitioner’s registration shall be restored and the Jurisdictional Assessing Officer shall activate the portal and login credentials within one week to enable compliance.

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