Facts of the Case

Pritam Nath, a practicing Architect, held GST Registration No. 18ADCPN9764H1Z2 with effect from 25.09.2017 and regularly filed returns until, due to personal difficulties and the COVID-19 pandemic, he failed to file returns for a continuous period of six months. On 17.12.2020, a show cause notice was issued proposing cancellation of registration for non-filing of returns, and by order dated 20.01.2021, the registration was cancelled with effect from that date. The petitioner's appeal filed on 31.03.2023 against the cancellation was rejected by the appellate authority, following which he approached the Gauhati High Court under Article 226 seeking restoration.

Issues Involved

  1. Whether cancellation of GST registration for non-filing of returns, once appellate remedy has been unsuccessfully exhausted, could still be interfered with in writ jurisdiction.
  2. Whether restoration of registration should be conditioned upon payment of outstanding statutory dues.
  3. Whether consistency with orders passed by coordinate benches in similar matters warranted similar relief here.

Petitioner's Arguments

  • The GST returns could not be filed for six months due to personal problems and COVID-19-related disruptions, and the resultant cancellation and subsequent rejection of the revocation appeal ought to be reconsidered.
  • Reliance was placed on various orders of coordinate benches of the same High Court directing restoration of GST registration in similar circumstances.

Respondent's Arguments

  • The Department's counsel noted that the appellate authority's order had not been placed on record by the petitioner but did not dispute that coordinate benches had passed orders directing restoration of GST registration upon complete payment of all dues.

Court Order/Findings

  • The Court reasoned that continued exclusion of the petitioner from the GST regime would be contrary to the interest of revenue, since it would prevent recovery of any statutory dues owed by him, and observed that requiring the petitioner to remain within the GST regime and pay dues better serves the exchequer's interest than leaving registration cancelled.
  • Following the consistent practice of the Court and coordinate benches in similar matters (including W.P(C) No. 6175/2022 and W.P(C) No. 576/2023), the cancellation order dated 20.01.2021 was set aside, subject to the petitioner clearing all outstanding statutory dues intimated by the department.
  • The Superintendent of Central GST, Guwahati was directed to intimate the total outstanding dues to the petitioner, upon payment of which the registration was to be restored by appropriate orders revoking the cancellation.

Important Clarification

Where GST registration has been cancelled for non-filing of returns and the revocation appeal has also been rejected, courts have shown a consistent willingness to set aside the cancellation and direct restoration of registration conditioned strictly upon the assessee clearing all outstanding statutory dues — reasoning that keeping a defaulting but compliant-going-forward assessee within the GST net better serves the revenue's interest than leaving the registration cancelled altogether.

Sections Involved

  • Section 29(2)(c), CGST Act, 2017 — empowers cancellation of registration where returns have not been furnished for a continuous prescribed period.
  • Section 30, CGST Act, 2017 — provides for revocation of cancellation of registration.
  • Section 107, CGST Act, 2017 — governs the appellate remedy against orders including rejection of revocation applications.

Decision – In Favour of

The decision favours the Assessee: the writ petition was allowed and the cancellation of GST registration was set aside, with restoration directed upon the petitioner clearing all outstanding statutory dues.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Gauhati High Court
  • Case No.: WP(C)/6930/2023
  • CNR: GAHC010267392023
  • Coram: Hon'ble Mr. Justice Soumitra Saikia
  • Decision Date: 05-12-2023
  • Disposal Nature: Allowed; cancellation set aside

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