Taxpayer Wins Conditional Relief from GST Registration Cancellation, Granted Chance to Rectify Compliance Issues Within 4 Weeks

HC allowed challenge to GST registration cancellation, directing petitioner to file pending returns and pay outstanding taxes within 4 weeks. Respondents must reactivate registration portal within one week. Cancellation order set aside conditionally, providing opportunity to rectify non-compliance without permanently disrupting business operations.

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

Analysis:
The petitioner filed a writ application challenging the cancellation of registration under the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017. The petitioner was issued a show cause notice for failing to file returns for six months. The petitioner's advocate argued that the petitioner intended to comply with the Act but failed to respond to the notice. Reference was made to a previous judgment where a similar cancellation was set aside upon fulfilling certain conditions. The respondent authorities contended that the cancellation was justified due to the petitioner's non-compliance with statutory provisions.

The court noted that the cancellation was based on non-filing of returns and not on tax evasion. It recognized that suspending or revoking the registration would hinder revenue recovery as the petitioner would be unable to conduct business. The court opined that a pragmatic approach should be taken, allowing the petitioner to continue business upon fulfilling necessary conditions. The respondents stated that final liability determination required the petitioner to file returns.

Based on the above considerations and a previous court directive, the court proposed setting aside the cancellation order, subject to the petitioner filing returns for the default period and paying the required tax, interest, fine, and penalty. The court directed the respondents to activate the portal for compliance within a week. Failure to meet the conditions within four weeks would result in dismissal of the petition. The judgment was issued without costs, and parties were instructed to act based on the official copy downloaded from the court's website. Photostat copies were to be provided upon request.

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