Cancellation of GST Registration Counter-productive to Revenue: Calcutta HC orders Revival of Registration on Payment of all Dues [Read Order]

The Calcutta High Court held that cancellation of GST ( Good and Services Tax ) registration for non-filing of GST returns without any allegation of tax evasion was counter-productive to revenue interests when the taxpayer is willing to continue its business. The court directed restoration of registration subject to payment of all statutory dues.

The petitioner, Meheraj Midde challenged the GST order cancelling his GST registration under Section 29 of the CGST Act for non-furnishing of returns under Section 39.

The petitioner, through counsels, Adv. Akshat Agarwal and Adv. Parikshit Karmakar, expressed willingness to continue business and undertook to file all pending returns and pay outstanding tax, interest, penalty, and fine.

The Court noted that the cancellation was solely due to default in filing returns, and there was no allegation of tax evasion or adoption of dubious means to avoid payment.

Justice Chowdhury observed that suspending or cancelling registration in such cases harms the revenue’s interest.

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It was observed that “Taking note of the fact that the suspension/revocation of registration would be counterproductive and works against the interest of the revenue since, the petitioner in such case would not be 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.”

Accordingly, the High Court set aside the cancellation order, subject to strict conditions. The petitioner was directed to file all pending returns for the default period and pay the applicable tax, interest, penalty, and fine within four weeks from receiving the server copy of the order.

If these conditions are met, the jurisdictional officer was instructed to restore the GST registration. However, it was clarified that if the petitioner fails to comply with all the instructions provided by the court, the writ petition will stand automatically dismissed and the order will not have any effect.

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