Small Business Wins GST Battle: Pandemic Hardship Recognized, Registration Restored with Compliance Conditions

HC allowed writ petition challenging GST registration cancellation. Despite time-barred appeal, court considered petitioner's small business status and pandemic challenges. Court directed registration restoration conditional on filing pending returns, paying taxes, interest, and penalties within four weeks. Order set aside without costs, emphasizing pragmatic approach to regulatory compliance.

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Issues:
1. Cancellation of registration under WBGST/CGST Act, 2017.
2. Barred appeal due to limitation.
3. Prayers for restoration of registration.

Detailed Analysis:
The judgment by the High Court of Calcutta dealt with a writ petition challenging the cancellation of registration under the WBGST/CGST Act, 2017. The petitioner had failed to file returns for a continuous period of six months, leading to the cancellation of registration. Despite filing a belated appeal, it was rejected as barred by limitation. The petitioner, through their advocate, expressed genuine intentions to continue business activities and comply with the provisions of the Act, including making necessary payments. The government pleader argued that the cancellation was justified due to non-filing of returns and the appeal being time-barred. The court noted the petitioner's small business status and pandemic-related difficulties, emphasizing no tax evasion allegations. The court highlighted the counterproductive nature of license revocation on revenue recovery and directed a pragmatic approach, considering the petitioner's willingness to comply.

Furthermore, the court observed that the petitioner had undertaken to fulfill all obligations under the Act and proposed setting aside the cancellation order subject to conditions. These conditions included filing returns for the default period and paying the requisite tax, interest, fine, and penalty. Compliance within four weeks would result in restoration of registration; failure would lead to dismissal of the petition. The court also directed the respondents to activate the portal promptly for compliance facilitation. Consequently, the cancellation order and the appellate authority's decision were set aside, with no costs imposed on either party. Lastly, the judgment clarified that the writ petition was disposed of without admission of the respondents' allegations, and parties could obtain certified copies of the order upon fulfilling necessary formalities.

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