GST Registration to Be Restored if Dues Fully Paid and Delay is Bona Fide: Bombay HC Imposes CSR Cost [Read Order]
Bombay HC held that GST registration must be restored if all dues are fully paid and the delay is bona fide, directs the company to pay Rs. 50,000 as CSR cost for delayed compliance.
![GST Registration to Be Restored if Dues Fully Paid and Delay is Bona Fide: Bombay HC Imposes CSR Cost [Read Order]](https://images.taxscan.in/h-upload/2025/10/06/2094366-gst-registration-bombay-hc-taxscan.webp "GST Registration to Be Restored if Dues Fully Paid and Delay is Bona Fide: Bombay HC Imposes CSR Cost [Read Order]")
In a recent ruling, the Bombay High Court held that GST registration should be restored when the taxpayer has fully paid all dues, including interest and late fees, and the delay in filing returns is found to be bona fide. The court further directed payment of a CSR cost for delayed compliance.
Azaria Corp LLP, the petitioner, filed a writ petition challenging the cancellation of its GST registration by the State Tax Department. The registration had been cancelled on 5 June 2023 due to the petitioner’s failure to file GST returns and non-payment of tax dues. The petitioner later paid the entire outstanding amount of Rs. 16,46,186 on 7 June 2024, along with interest and late fees of Rs. 6,27,935.
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The petitioner’s counsel argued that the delay was unintentional and due to bona fide reasons, and that the petitioner had already cleared all dues. They further argued that continuing the cancellation would prevent the petitioner from conducting business, which would also result in loss of GST revenue for the State.
The counsel pointed out that in similar cases, the High Court had ordered restoration of registration once dues were paid.
The department’s counsel argued that the cancellation was valid since it was based on the petitioner’s failure to file returns. The counsel stated that in earlier cases, restoration was allowed on the basis of concessions made by the Revenue, but he did not have specific instructions in the present matter and left the decision to the court.
The Division Bench comprising Justice M. S.Sonak and Justice Advait M. Sethna observed that while the Revenue was justified in cancelling the registration initially, the petitioner had now made full payment of dues, interest, and late fees.
The court explained that permanent cancellation for such a curable default would be disproportionate, and restoration would serve the interests of both the taxpayer and the Revenue. The court also referred to similar judgments of the Bombay and Orissa High Courts where registration was restored after full compliance.
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The court directed the department to inform the petitioner in writing within 15 days if any further penalty or dues were payable. If such intimation was given, the petitioner was required to pay the amount within 15 days of receipt.
If no intimation was given, or payment was made as directed, the cancellation order would stand quashed. The court further directed the petitioner to pay Rs. 50,000 as a CSR contribution to KEM Hospital within 15 days.
The court held that restoration of registration in such cases aligns with the doctrine of proportionality and that the petitioner, having cleared all dues, was entitled to relief. The writ petition was allowed with the above directions.
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