Conditional restoration of GST registration granted where cancellation for non-filing could be cured by return filing and tax compliance.

The Calcutta HC held that GST registration cancelled for non-filing of returns could be interfered with where there was no allegation of a dubious tax evasion method, because cancellation disables business operations, invoice issuance and may hinder tax recovery. The Court therefore set aside the cancellation conditionally and directed restoration of registration, subject to the taxpayer filing the pending returns and paying the dues towards tax, interest, fine and penalty within the stipulated time. The portal was also to be activated to enable compliance.

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Issues: Whether the cancellation of GST registration for non-filing of returns should be set aside and the registration restored subject to compliance with tax filing and payment obligations.

Analysis: The registration had been cancelled for non-filing of returns. No allegation of a dubious method to evade tax was made. The order proceeded on the basis that cancellation of registration prevents the business from operating, disables issuance of invoices, and may ultimately hinder tax recovery. In these circumstances, the cancellation was considered capable of being interfered with, but only on the condition that the defaulting returns are filed and the dues towards tax, interest, fine and penalty are paid within the stipulated time. Directions were also issued for activation of the portal to enable compliance.

Conclusion: The cancellation order was set aside conditionally, and registration was to be restored upon compliance with the specified requirements within the prescribed time.

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