GST registration cancellation for return defaults can be reversed conditionally, with compliance and tax payment required for restoration.

Cancellation of GST registration for non-filing of returns may be set aside where there is no allegation of a dubious device to evade tax and continuation of suspension would block business operations and tax recovery. The Calcutta HC approach, as recorded, was to balance revenue protection with business continuity by directing restoration of registration on condition that the taxpayer files the pending returns and pays the due tax, interest, fine and penalty, if unpaid. A further direction was issued to activate the portal to enable compliance, and the consequential appellate order was also set aside.

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Issues: Whether cancellation of GST registration for non-filing of returns should be set aside subject to compliance with return filing and payment of tax dues, and whether consequential restoration of registration could be directed.

Analysis: The registration had been cancelled for non-filing of returns. The order records that there was no allegation of a dubious device to evade tax and that keeping the registration suspended would prevent the assessee from carrying on business, raising invoices, and ultimately recovering tax. On that basis, a pragmatic approach was adopted to protect revenue while allowing business continuity. The cancellation was directed to be set aside on condition that the petitioner files returns for the default period and pays the requisite tax, interest, fine and penalty, if unpaid. A further direction was issued to activate the portal to enable compliance, and the earlier appellate order was also set aside consequentially.

Conclusion: The cancellation order was quashed subject to compliance, with a corresponding direction for restoration of registration upon fulfilment of the stated conditions.

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