2026 (4) TMI 141 - HC - GST

GST registration cancellation and delayed appeal: High Court restores registration where cancellation was unsustainable and revenue was not prejudiced.

GST registration cancellation has civil consequences and must comply with the statutory scheme, including hearing requirements and the limits on ... Cancellation of GST registration - rejection of the restoration request - Statutory limitation in appeal - bona fide reasons for not filing the appeal - Opportunity of Hearing - Exercise of writ jurisdiction Cancellation of GST registration - HELD THAT:- Following observations as made by the Court in Kishore Nichani [2026 (1) TMI 1560 - BOMBAY HIGH COURT], held that there were bona fide reasons for not filing the appeal and therefore, cancellation of registration itself is prejudicial as held by this Court. The Court accepted that the Appellate Authority had no power to condone delay beyond the period permitted by statute and, therefore, the rejection of the appeal on limitation could not be faulted on that ground. However, the Court found that the petitioner had shown bona fide reasons for not filing returns and held that such circumstances ought not to result in loss of registration. Proceeding on the principle that cancellation of registration has adverse civil consequences and that continued cancellation does not benefit the revenue where the assessee can be brought back into the tax fold by compliance, the Court exercised writ jurisdiction to direct restoration of registration while permitting the petitioner to comply with statutory obligations within the time granted. [Paras 8, 9] The cancellation order and the appellate order were quashed, the registration was directed to be restored, and the petitioner was allowed time to fulfil remaining obligations under the Act. Final Conclusion: The Court held that although the statutory appeal was beyond the condonable period, the petitioner's registration ought not to remain cancelled in the facts of the case. Exercising writ jurisdiction, it set aside both orders, directed restoration of GST registration, and granted time for statutory compliance. Issues: Whether the cancellation of GST registration and the appellate rejection of the restoration request could be interfered with in writ jurisdiction, and whether the registration deserved restoration despite the delay in filing the appeal.Analysis: Cancellation of GST registration carries civil consequences and can be sustained only in accordance with the statutory scheme. The relevant provisions recognise cancellation, revocation, and the requirement of hearing, while the appellate remedy under the GST framework is subject to statutory limitation. On the facts, the cancellation order was found unsustainable and the appellate authority could not extend limitation beyond the statutory bounds. The Court also took note that the petitioner had shown bona fide reasons for the default and that restoration would not prejudice the revenue.Conclusion: The cancellation order and the appellate order were both quashed, and restoration of GST registration was directed. The issue was decided in favour of the assessee.Final Conclusion: The petitioner obtained restoration of GST registration through writ intervention, with liberty to comply with remaining statutory obligations.Ratio Decidendi: Where GST registration cancellation has civil consequences, and the statutory appellate forum lacks power to condone delay beyond the prescribed limit, the High Court may in appropriate cases restore the registration in writ jurisdiction when the cancellation is found unsustainable and restoration would not prejudice revenue.