GST registration cancelled for non-filing of returns: belated return filing allowed after paying tax, interest and late fees.

Cancellation of GST registration for failure to file returns was challenged. The HC held that where the taxpayer had already deposited outstanding tax along with interest and late payment charges as if returns were duly filed, interests of justice warranted permitting belated filing of GST returns; if the returns were found non-compliant, any further demand raised by the authorities had to be paid forthwith. Upon such compliance, the cancellation order was directed to stand revoked, and the petition was disposed of.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, after cancellation of GST registration for non-filing of returns under section 29(2)(b), restoration/revocation should be permitted when the taxpayer has deposited the outstanding self-assessed tax, interest, and late fees for the relevant period and expresses readiness to file pending returns.

(ii) What conditions and consequences should govern such permission to file returns and the revocation of cancellation, including the authority's power to verify, process returns, determine liability, and raise any further demand.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Revocation/restoration of registration after cancellation for non-filing of returns

Legal framework (as discussed by the Court): The Court noted that cancellation was effected by invoking section 29(2)(b) of the GST Act for non-filing of returns. The Court also recorded that the deposit was made in the Electronic Cash Ledger maintained on the GSTN Portal as per section 49 of the Gujarat SGST Act, 2017 and Rule 87 of the Gujarat SGST Rules, 2017.

Interpretation and reasoning: The Court treated the petitioner's deposit of outstanding dues (tax, interest, and late fees) for April 2022 to December 2024 as a material factor, observing that the amounts had been deposited "as if the returns would have been duly filed". Since no other contentions were raised by either side and the respondent authority indicated that, upon allowing filing of returns, it would process the returns and determine liability under the GST law while considering the deposit, the Court found it appropriate "in the interest of justice" to permit filing of returns and facilitate revocation upon compliance.

Conclusions: The Court permitted the petitioner to file GST returns for the relevant period despite the earlier cancellation for non-filing, on the basis that the petitioner had already deposited the outstanding tax along with interest and late payment charges and was willing to file the returns.

Issue (ii): Conditions for return-filing permission and revocation; authority's verification and further demand

Legal framework (as discussed by the Court): The Court accepted the respondents' position that returns, once filed, would be processed and tax liability would be determined in accordance with the GST Act, and that deposits in the Electronic Cash Ledger would be accounted for.

Interpretation and reasoning: The Court balanced the petitioner's request for restoration with the respondents' statutory role to scrutinize compliance. It therefore conditioned relief on lawful filing of returns and allowed the authorities to verify whether the return-filing is "in accordance with law". The Court further provided that if any demand/outstanding amount is raised upon such processing, the petitioner must pay it forthwith.

Conclusions: The Court directed that the petitioner may file the GST returns; if the filings are not in accordance with law, the petitioner must promptly pay any outstanding amount demanded. Upon such compliance, the cancellation of registration "shall stands revoked". The petition was disposed of with no order as to costs.

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