GST registration cancellation for return defaults may be reversed when the taxpayer regularises filings and clears statutory dues.

Cancellation of GST registration for non-filing of returns may be reconsidered where the taxpayer later files pending returns and regularises dues. The stated approach is pragmatic: keeping registration cancelled can prevent business operations and invoice generation, which may also hinder revenue recovery. The taxpayer should be allowed to cure the default by filing all outstanding returns and paying tax, interest, fine and penalty, where applicable. On compliance with the stipulated conditions within the time granted, the cancellation, refusal to revoke registration, and related appellate order were set aside and registration was directed to be restored.

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Issues: Whether the cancellation of GST registration for non-filing of returns should be set aside and the registration restored on the petitioner filing pending returns and discharging tax dues.

Analysis: The registration had been cancelled on the ground of non-filing of returns, but the record showed that the petitioner had filed the returns after the show cause notice. The Court took the view that cancellation of registration would be counterproductive where the taxpayer is prevented from carrying on business and generating invoices, which in turn affects revenue recovery. The Court therefore adopted a pragmatic approach and held that the petitioner should be given an opportunity to regularise the default by filing all pending returns and paying tax, interest, fine and penalty, if not already paid.

Conclusion: The cancellation order, the rejection of revocation, and the appellate order were set aside, and the registration was directed to be restored upon compliance with the stipulated conditions within the time granted.

Ratio Decidendi: Cancellation of GST registration for return defaults may be set aside where the taxpayer regularises the default and the circumstances warrant restoration of registration to protect business continuity and revenue recovery.

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