Cancellation of GST registration would work against the interest of revenue – HC

Cancellation or Suspension of GST registration would be counterproductive and work against the interest of the revenue – HC

In a recent judgment, Hon’ble Calcutta High Court observed that suspension/revocation of the GST registration would be counterproductive and work against the interest of the revenue as the assessee would not be able to carry on his business which would impact recovery of tax.

ABCAUS Case Law Citation:
4883 (2025) (11) abcaus.in HC

In the instant case, the Petitioner had challenged the order of cancellation of GST Registration passed under the provisions of WBGST/CGST Act, 2017 (the Act)

The GST registration of the petitioner had been cancelled on the ground of non-filing of GST returns under section 39 of the Act.

The Counsel appearing in support of the writ petition submitted that the petitioner was interested to continue with the business and is agreeable to comply with the provisions of the said Act and to pay the outstanding tax, interest, penalty and fine as may be applicable.

The Hon’ble High Court observed that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It was not the case of the petitioner that the petitioner had been adopting dubious process to evade tax.

The Hon’ble High Court further observed that suspension/revocation of the registration would be counterproductive and work 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.

In view of the above, the Hon’ble High Court opined that the GST Authorities should take a pragmatic view in the matter and permit the petitioner to carry on his business.

Accordingly, the Hon’ble High Court proposed to set aside the order of cancellation subject to the condition that the petitioner files the returns for the entire period of default and pays requisite amount of tax, interest, penalty and fine as may be applicable.

It was made clear that if the petitioner complies with the directions/conditions noted above within four weeks, the petitioner’s registration under the 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.

For the purpose of compliance of the above directions, the GST Authorities were directed to activate the petitioner’s portal and login credentials within one week so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty.

The writ petition was accordingly disposed of.

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