Bombay High Court Holds GST Registration Cancellation Orders Can Be Set Aside Despite Limitation to Uphold Right to Trade

Background and Reliefs Sought
The petitioner approached the Bombay High Court seeking to quash the order dated 17.08.2022 cancelling its GST registration, as well as the appellate order dated 19.06.2025 upholding the cancellation. The petitioner also sought restoration of its GST registration with effect from 22.01.2022 and permission to file pending returns.

Arguments and Legal Context
The petitioner relied on several precedents, including Rohit Enterprises v. Commissioner State GST and Mafatlal Industries Ltd. v. Union of India, to argue that the right to carry on trade is constitutionally protected and should not be curtailed by procedural limitations under the GST Act. The State, represented by the learned AGP, opposed the petition, contending that there was a delay of 877 days in filing the appeal and that the Deputy Commissioner lacked authority to condone such delay under Section 107 of the Maharashtra Goods and Services Tax Act, 2017.

Court’s Reasoning
The Court referred to its earlier decision in Rohit Enterprises, where it was held that the provisions of the GST enactment must not be interpreted in a manner that denies citizens their constitutional right to carry on trade and commerce under Articles 19(1)(g) and 21 of the Constitution. The Court emphasized that the objective of limitation provisions is to bring finality to disputes, not to divest individuals of substantive rights due to procedural lapses.

The Court further noted that while the Deputy Commissioner has no statutory power to condone delays beyond 30 days under Section 107, constitutional courts are not bound by such statutory limitations when exercising their writ jurisdiction under Article 226. The Court cited the Supreme Court’s decision in Mafatlal Industries Ltd., which affirmed that constitutional remedies cannot be curtailed by statutory provisions.

The Court also observed that in cases of GST registration cancellation, the State does not acquire any vested right by the mere efflux of time, and denying restoration of registration would ultimately defeat the objectives of the GST regime and result in loss of revenue.

Decision and Directions
Following the binding precedent of its coordinate benches, the Bombay High Court allowed the writ petition. It quashed the orders cancelling the petitioner’s GST registration and the appellate order upholding the cancellation. The Court restored the petitioner’s GST registration from 22.01.2022, subject to the condition that the petitioner files all up-to-date GST returns and pays all pending dues, including interest, penalty, and late fees as per Rule 23(1) of the MGST Rules 2017.

Conclusion
This judgment reinforces the principle that statutory limitations under the GST Act cannot be interpreted to override the fundamental right to carry on trade. The High Court’s writ jurisdiction remains available to remedy procedural injustices, ensuring that substantive rights are not lost due to technicalities. The decision provides significant relief to taxpayers facing cancellation of GST registration due to delayed appeals, provided they comply with their statutory obligations.