GST registration cancellation for non-filing of returns may be restored subject to filing returns and clearing statutory dues.

Cancellation of GST registration for non-filing of returns was held open to restoration where there was no allegation of any dubious device to evade tax and continued cancellation would hinder business without aiding revenue recovery. The Court noted that final tax liability could not be ascertained unless the pending returns were filed, so restoration was permitted subject to strict compliance with outstanding tax obligations. The cancellation order and appellate order were set aside on condition that the petitioner file the pending returns and pay the requisite tax, interest, fine and penalty within the stipulated time, failing which the writ relief would not operate.

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Issues: Whether the cancellation of GST registration for non-filing of returns was liable to be set aside and the registration restored subject to filing of returns and payment of tax, interest, fine and penalty.

Analysis: The registration had been cancelled on the ground of non-filing of returns. The Court noted that there was no allegation of any dubious device to evade tax and that continued cancellation would prevent the petitioner from carrying on business and would not aid revenue recovery. It was also noticed that final liability could not be determined unless the returns were filed. In these circumstances, and following the approach adopted in similar cases, the Court considered it appropriate to permit restoration subject to compliance with the outstanding tax obligations.

Conclusion: The cancellation order and the appellate order were set aside subject to the petitioner filing the pending returns and paying the requisite tax, interest, fine and penalty within the stipulated time, failing which the writ petition would stand dismissed and the relief would not operate.

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