Small Business Gets Second Chance: GST Registration Reinstated with Conditional Four-Week Window to Clear Pending Returns and Taxes

HC allowed the writ petition challenging GST registration cancellation. The court granted the petitioner four weeks to file pending returns and pay outstanding taxes, interest, and penalties. If complied, registration would be restored. Failure to meet conditions would result in petition dismissal. The judgment emphasized providing small businesses an opportunity to rectify tax non-compliance while ensuring revenue collection.

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Issues involved:
Challenge to the cancellation of registration under the Central/West Bengal Goods and Services Tax Act, 2017.

Analysis:
The judgment pertains to a writ petition challenging the cancellation of registration under the Central/West Bengal Goods and Services Tax Act, 2017. The petitioner's registration was cancelled due to non-filing of returns for six consecutive months following a show cause notice. The petitioner, represented by Mr. Dey, contended that unforeseen circumstances prevented them from responding to the show cause and applying for revocation of the cancellation order. The petitioner expressed willingness to comply with the Act and undertake payment of arrears. On the other hand, Mr. Siddiqui appeared for the State-respondents.

Upon considering the arguments and evidence, the Honorable Judge opined that the petitioner, a small businessman, should be given an opportunity to continue their business. It was noted that suspending or revoking the license would hinder revenue collection as the petitioner would be unable to raise invoices, impacting tax recovery. Referring to a previous case, the Judge decided to set aside the cancellation order subject to the condition that the petitioner files returns for the default period and pays the necessary tax, interest, fine, and penalty.

The judgment stipulated a timeframe for compliance, directing the restoration of registration if conditions are met within four weeks. Failure to comply would result in the dismissal of the writ petition. The respondents were instructed to activate the portal promptly for the petitioner's compliance. Notably, since no affidavit-in-opposition was submitted, the allegations in the writ petition were not deemed admitted by the respondents. The writ petition was disposed of without costs, with all parties instructed to act based on the official server copy of the order downloaded from the Court's website.

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