GST registration cancellation for non-filing may be set aside subject to filing returns and payment of dues.

The petitioner’s registration under the West Bengal Goods and Services Tax/Central Goods and Services Tax Act, 2017 was cancelled for failure to furnish returns for a continuous period of six months.

A show-cause notice was issued on 17 July 2025, but the petitioner did not file a reply. The registration was subsequently cancelled by order dated 7 August 2025.

The petitioner approached the High Court, stating that he was willing to file all pending returns and pay the applicable tax, interest, fine and penalty.

The respondents defended the cancellation on the ground that the petitioner had failed to comply with the statutory requirements despite being given an opportunity to show cause.

Whether the cancellation of the petitioner’s GST registration for non-filing of returns should be set aside when the petitioner undertakes to file the returns for the entire period of default and pay the applicable tax, interest, fine and penalty.

Whether restoration of registration could be made conditional upon compliance with the Court’s directions within a specified period.

The Court applied the statutory framework governing registration and cancellation under the WBGST/CGST Act, 2017, under which failure to furnish returns for the prescribed period may justify cancellation of registration.

It also applied the principle that the power of cancellation should be exercised pragmatically where restoration would facilitate payment and recovery of revenue, particularly when there is no allegation of tax evasion or other dubious conduct.

The Court relied on the Division Bench decision in Subhakar Golder v. Assistant Commissioner of State Tax, Serampore Charge, MAT 639 of 2024, decided on 9 April 2024, which permitted restoration of registration subject to filing returns for the entire default period and payment of the requisite tax, interest, fine and penalty.

The Court accepted that the registration had been cancelled solely because of non-filing of returns and noted that the respondents had not alleged any attempt by the petitioner to evade tax or adopt a dubious process.

Although the petitioner had failed to respond to the show-cause notice, the Court considered his undertaking to comply with the statutory obligations and observed that cancellation or suspension of registration could be counterproductive because the petitioner would be unable to issue invoices or continue business, thereby adversely affecting revenue recovery.

Since the respondents could determine the petitioner’s final tax liability only after the pending returns were filed, the Court followed the approach adopted in Subhakar Golder and made restoration conditional upon filing all returns and payment of the applicable dues, including interest, fine and penalty.

If the petitioner complied within four weeks from receipt of the server copy of the order, the Jurisdictional Officer was directed to restore the registration.

The respondents were further directed to activate the petitioner’s portal and login credentials within one week to enable compliance.

Failure to comply would result in the benefit of the order not accruing to the petitioner and the writ petition being automatically dismissed. The writ petition was disposed of without any order as to costs.