GST registration cancellation for return default may be reversed in writ proceedings where livelihood and trade rights are affected

Cancellation of GST registration for non-filing of returns may be interfered with in writ jurisdiction where denial of restoration would unfairly affect the right to carry on trade and livelihood, especially if the statutory appeal is barred by limitation. The Court treated GST compliance as important but emphasised that the tax regime should facilitate legitimate business rather than stifle it, and that small traders may not always effectively respond to cancellation notices. In such cases, restoration may be allowed subject to the assessee regularising compliance by filing the required returns within the time granted.

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Issues: Whether the cancellation of GST registration for non-filing of returns, coupled with the petitioner's inability to pursue the statutory appeal within limitation, warranted interference under writ jurisdiction and restoration of registration.

Analysis: The petitioner's registration had been cancelled for non-filing of returns. The Court noted the pleaded hardship that GST registration was necessary to continue business and that the statutory appellate remedy had become unavailable because of limitation. Relying on the principle that GST provisions should not be interpreted to deny the constitutional right to carry on trade and livelihood, and following earlier decisions permitting revival of cancelled registrations subject to compliance, the Court found it appropriate to exercise writ jurisdiction. The Court also observed that small traders may not effectively respond to cancellation notices and that the object of the tax regime is to facilitate, not stifle, legitimate trade while ensuring compliance through returns, tax payment, and other safeguards.

Conclusion: The cancellation order was set aside and the petitioner was permitted to restore compliance by filing returns within the time granted by the Court.

Ratio Decidendi: In appropriate cases, cancellation of GST registration for procedural default may be interfered with in writ jurisdiction where denial of restoration would unjustly impair the right to carry on trade and livelihood, provided the defaulting assessee is given an opportunity to regularise compliance.

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