In a significant judgment, the Calcutta High Court addressed the issue of cancellation of GST registration on procedural grounds and clarified the legal position regarding restoration of such registration when the taxpayer is willing to cure the defaults.
The petitioner challenged the cancellation of his GST registration, which was ordered on March 13, 2025, due to non-filing of returns for more than six months. The cancellation order noted that no reply was submitted to the show cause notice and highlighted procedural irregularities as the basis for cancellation. The petitioner’s statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 was dismissed as time-barred, including the grace period provided under the statute.
Counsel for the petitioner argued that unless the GST registration was restored, the petitioner would be unable to carry on business, resulting in loss of livelihood and prejudice. It was submitted that the petitioner was willing to comply with all procedural requirements for restoration, and that restoration would ultimately benefit the revenue authorities and the State by enabling continued tax collection. The petitioner relied on previous decisions, including those in Subhankar Golder and Marjina Khatun, where courts had allowed restoration of GST registration upon compliance with statutory requirements.
The respondent revenue authorities did not oppose restoration, submitting that it could be done in accordance with law.
The Court’s Reasoning and Legal Principle
Justice Aniruddha Roy, after considering the submissions and the record, observed that the cancellation was due to procedural non-compliance, which is curable. The Court emphasized that substantive justice should not be defeated by procedural lapses, and that the law is well settled in this regard. The Court cited the Division Bench decision in Subhankar Golder, which allowed restoration of registration subject to filing of returns and payment of tax, interest, and penalties, and the coordinate bench decision in Marjina Khatun, which similarly favored restoration in the interest of revenue and justice.
The Court further clarified that the existence of an alternative remedy is not an absolute bar to the exercise of writ jurisdiction under Article 226 of the Constitution, especially where the facts and circumstances warrant intervention. In this case, since the statutory period for appeal had expired and the petitioner’s business was entirely halted due to cancellation, the Court found it appropriate to entertain the writ petition.
Final Decision and Directions
The High Court set aside and quashed both the cancellation order dated March 13, 2025 and the appellate order dated February 24, 2026. The petitioner was directed to file all pending returns and pay the requisite tax, interest, fine, and penalty within four weeks. Upon compliance, the GST registration was to be restored forthwith with all consequential effects. The Court made it clear that failure to comply within the stipulated period would result in automatic dismissal of the writ petition and denial of the benefit of restoration.
To facilitate compliance, the GST authorities were directed to open the portal for the petitioner to enable filing of returns and payment of dues. The writ petition was disposed of with these directions, and the parties were directed to act on the server copy of the order.
This judgment reinforces the principle that procedural lapses leading to cancellation of GST registration are curable, and that restoration should be permitted where the taxpayer is willing to comply with statutory requirements, thereby balancing the interests of justice and revenue.
Case Reported at:
Case Name: Bal Krishna Sunar v. Superintendent Rangpo 1 Range Gangtok Division CGST & Central Excise (GST) and Anr.
Case Citation: (2026) taxcode.in 1058 HC
