GST registration cancellation for non-filing may be set aside in writ jurisdiction when business continuity and return compliance can be restored.

GST registration cancelled for non-filing of returns may be interfered with in writ jurisdiction where the cancellation would prevent continued business and the assessee is willing to regularise the defaults. The Madras HC treated the consequences of cancellation as severe because registration is integral to carrying on trade, and accepted that exclusion from the GST system should not be permanent where compliance can still be achieved. It therefore recognised relief through restoration of registration, subject to filing the pending returns within the time granted and other directed statutory compliance.

---

---

Issues: Whether cancellation of GST registration for non-filing of returns should be interfered with in writ jurisdiction where the assessee could not pursue the statutory appeal within limitation and the cancellation was causing hardship to carry on business and livelihood.

Analysis: The cancellation of registration was founded on non-filing of returns, but the Court treated the consequences of such cancellation as severe because GST registration is necessary for carrying on the business. The Court noted the grievance that the statutory appeal was not entertained on limitation and accepted the broader approach adopted in similar cases, where the object of the GST regime was considered to facilitate trade and tax compliance, not to permanently exclude small traders from the system. The Court relied on the constitutional protection of trade and livelihood and held that, in the facts presented, the petitioner should be given an opportunity to regularise the defaults by filing returns.

Conclusion: The cancellation order was liable to be set aside and the petitioner was entitled to restoration of GST registration upon filing the pending returns within the time granted.

Final Conclusion: The writ petition succeeded and the impugned cancellation was interfered with so that the assessee could re-enter the GST fold by complying with the directed statutory requirements.

Ratio Decidendi: Where cancellation of GST registration would effectively deprive an assessee of the ability to carry on business, and the assessee is otherwise willing to regularise the defaults, writ jurisdiction may be exercised to set aside the cancellation and permit restoration subject to compliance with return-filing obligations.

---