GST registration cancellation overturned due to circumstances beyond petitioner's control despite non-filing GSTR-3B returns

The HC allowed the writ petition challenging cancellation of petitioner's GST registration for non-filing of GSTR-3B returns for six consecutive months. The Court found that petitioner's inability to file returns was due to loss of login credentials through cyber cafe closure, constituting circumstances beyond petitioner's control. After regaining access with CGST assistance, petitioner filed all defaulted returns with penalties. Relying on similar precedents, the HC directed CGST Pasighat Range to revoke the cancellation and restore GST registration upon payment of outstanding statutory dues, establishing that procedural non-compliance caused by factors beyond assessee's control warrants leniency when followed by compliance efforts.

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1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this writ petition are:

(a) Whether the cancellation of the petitioner's GST registration on the ground of non-filing of GSTR-3B returns for more than six consecutive months and non-response to GSTR-3A notice was legally sustainable.

(b) Whether the petitioner's inability to file returns due to loss of login credentials, caused by circumstances beyond his control, constitutes sufficient cause to revoke the cancellation of GST registration.

(c) Whether the petitioner, having subsequently filed all defaulted returns along with applicable penalties, is entitled to restoration of GST registration.

(d) Whether the precedents established by this Court in similar writ petitions (WP(C) 7057/2024 and WP(C) 70/2025) apply to the facts of the present case, thereby entitling the petitioner to similar relief.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a): Legality of Cancellation of GST Registration for Non-Filing of Returns

The Goods and Services Tax Act, 2017, mandates regular filing of returns such as GSTR-3B and GSTR-3A. Non-filing for a continuous period of six months authorizes the tax authorities to cancel the GST registration of the assessee. This is a statutory provision aimed at ensuring compliance and preventing tax evasion.

The Superintendent of CGST Pasighat Range passed the cancellation order dated 26.12.2019 on the ground that the petitioner had not filed returns for more than six consecutive months and had not responded to the GSTR-3A notice.

The Court recognized the statutory basis for such cancellation but examined whether the facts justified strict application of the provision in this case.

Issue (b): Effect of Loss of Login Credentials and Inability to Access GST Portal

The petitioner contended that the inability to file returns was due to loss of login credentials, caused by the closure of the cyber cafe through which the petitioner had initially registered and accessed the GST portal. The petitioner claimed ignorance of the cancellation notice due to lack of access to e-mails and GST portal.

The Court considered this as a significant factual circumstance. The petitioner had no direct control or fault in losing access credentials, which prevented compliance. The petitioner's subsequent application on 05.04.2025 to change login credentials and the assistance provided by the Superintendent of CGST to reset credentials on 06.05.2025 were relevant facts.

The Court interpreted this as a sufficient cause to excuse the initial non-filing and non-response, emphasizing that procedural non-compliance caused by factors beyond the petitioner's control warranted leniency.

Issue (c): Filing of Defaulted Returns and Payment of Penalties

After regaining access, the petitioner filed all defaulted returns up to April 2020, including late fines and penalties as prescribed under the GST law. The petitioner also expressed willingness to file returns and pay penalties for any remaining outstanding periods upon revocation of cancellation.

The Court found that acceptance of defaulted returns by the GST authorities demonstrated the petitioner's bona fide intention to comply with statutory obligations. This fact weighed in favor of restoring the registration.

Issue (d): Applicability of Precedents

The petitioner relied on two prior orders of this Court in WP(C) 7057/2024 and WP(C) 70/2025, where similar relief was granted under comparable facts. The respondents conceded that those precedents were applicable.

The Court examined those precedents and found that they squarely covered the present case, particularly regarding the principle that cancellation of GST registration can be revoked if the assessee files all pending returns and pays outstanding dues, especially when non-filing was due to circumstances beyond the assessee's control.

The Court emphasized consistency and fairness in applying these principles.

3. SIGNIFICANT HOLDINGS

The Court held that:

"The orders dated 03.01.2025 and 24.02.2025 passed in Krishanu Borthakur and Ms Yassung Yangfo would cover the case of the petitioner and accordingly, the petitioner would be entitled to be provided with the similar relief as granted in the above two cases."

The Court directed the Superintendent of CGST and CX Pasighat Range to revoke the cancellation of the petitioner's GST registration and to intimate the petitioner about any outstanding statutory dues.

Upon payment of such dues, the respondent authority was directed to pass appropriate orders restoring the GST registration.

The Court's reasoning established the following core principles:

• Cancellation of GST registration for non-filing of returns is subject to reconsideration where non-compliance arises from factors beyond the assessee's control.
• Filing of all defaulted returns along with payment of applicable penalties and outstanding dues is a condition precedent for restoration of registration.
• Precedents granting relief in similar factual contexts are binding and must be applied consistently to ensure fairness.
• The GST authorities have a duty to assist genuine taxpayers in rectifying procedural lapses caused by circumstances such as loss of access credentials.

Final determination was that the writ petition was to be disposed of by directing revocation of cancellation and restoration of GST registration upon compliance with outstanding statutory dues.

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