GST registration cancellation for non-filing of returns may be set aside conditionally when no tax evasion is alleged.

Cancellation of GST registration for non-filing of returns may be interfered with where there is no allegation of a dubious device to evade tax and restoration is made conditional on compliance. The HC adopted a pragmatic approach, noting that inability to operate the business and issue invoices was counterproductive, including for revenue recovery. It directed restoration of registration subject to filing returns for the entire default period and payment of all outstanding tax, interest, fine and penalty, if unpaid, within the stipulated time, and also required activation of the portal to enable compliance. Failure to comply would result in dismissal of the writ petition.

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

Analysis: The registration had been cancelled for non-filing of returns. There was no allegation of any dubious device to evade tax. The inability of the registered person to carry on business and raise invoices was considered counterproductive, including from the standpoint of revenue recovery. In these circumstances, a pragmatic approach was warranted. The order of cancellation was, therefore, liable to be interfered with, but only upon compliance with the direction to file returns for the entire default period and pay the requisite tax, interest, fine and penalty, if unpaid. The respondents were also directed to activate the portal to enable compliance within the stipulated time.

Conclusion: The cancellation order was set aside conditionally, and registration was to be restored if the petitioner complied with the directed tax and return-filing obligations within the specified period; failing such compliance, the writ petition would stand dismissed automatically.

Final Conclusion: Relief was granted in a conditional form, permitting restoration of registration upon full compliance with the prescribed fiscal obligations.

Ratio Decidendi: Cancellation of GST registration for default in filing returns may be interfered with where there is no allegation of tax evasion and restoration is conditioned on filing pending returns and payment of all dues.

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