Facts of the Case

The petitioner, M/S Arun Kumar Srivastava, a proprietorship, challenged the order dated 24.08.2022 passed by the Assistant Commissioner, State Tax, Amethi, cancelling its GST licence on the ground of non-payment of tax due, as well as the subsequent appellate order dated 19.10.2023 passed by the Additional Commissioner, Grade-2 (Appeal), State Tax, Ayodhya, rejecting the appeal (Appeal No.32 of 2023). The appellate authority had rejected the appeal on the ground that although the petitioner had submitted returns and paid the tax due, the interest component remained unpaid. By the time the matter reached the High Court, the petitioner's counsel represented, on instructions, that the petitioner had, after the appellate order, paid not only the tax amount but also the interest, and was seeking a consequential direction for renewal of the GST licence so that business operations, which had remained disrupted since the 2022 cancellation, could resume.

Issues Involved

  1. Whether the GST licence, cancelled for non-payment of tax and subsequently sought to be revived on payment of tax and interest, ought to be renewed by the authorities.

Petitioner's Arguments

  • After the appellate order rejecting the appeal on the ground of unpaid interest, the petitioner paid both the outstanding tax amount and the interest, and sought a direction to the respondent to renew the GST licence.
  • The petitioner expressed readiness to pay any further amount that may be communicated to him within seven days of such communication.

Respondent's Arguments

  • No independent contest to the petitioner's claim of subsequent payment is recorded in the order; the State's counsel is noted only as representing the respondent-authorities, without recorded objections beyond the original grounds for cancellation and appellate rejection.
  • The original position of the Department, reflected in the cancellation and appellate orders, was that the licence had rightly been cancelled for non-payment of tax due, and the appeal had rightly been rejected because the interest component remained outstanding even after the tax and returns were regularised.

Court Order/Findings

  • On the basis of the petitioner's counsel's submission, and on instructions confirming that returns had been filed and both tax and interest paid, the Court directed the respondent to take steps for renewing the petitioner's GST licence within ten days of communication of the order.
  • If any further amount was found due, the petitioner was directed to be communicated the same and to pay it within seven days of such communication.
  • The writ petition was disposed of on these terms, without the Court independently examining or ruling on the legality of the original cancellation order dated 24.08.2022 or the appellate order dated 19.10.2023.

Important Clarification

Where a GST registration has been cancelled for non-payment of tax and the assessee subsequently clears both the tax and the interest that formed the basis for cancellation or appellate rejection, a writ court may direct renewal of the registration on that basis alone, as a practical resolution, without needing to adjudicate whether the original cancellation or appellate order was legally correct.

Sections Involved

  • Section 29, CGST/UPGST Act, 2017 — governs cancellation of GST registration, including for non-payment of tax due.
  • Section 107, CGST/UPGST Act, 2017 — appeal provision under which the Additional Commissioner (Appeal) rejected the petitioner's appeal.
  • Section 50, CGST/UPGST Act, 2017 — interest on delayed payment of tax, the unpaid component that led to rejection of the appeal.

Decision – In Favour of

This is a disposal with directions rather than a decision on merits, in favour of the Assessee on the practical outcome. The Court did not rule on whether the cancellation or appellate rejection was lawful; it simply directed renewal of the GST licence on confirmation that the tax and interest dues had since been paid.

Related Case Laws

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

Case Details

  • Court: High Court of Judicature at Allahabad, Lucknow Bench
  • Case No.: WRIT TAX No. 218 of 2023
  • CNR: 2023:AHC-LKO:74222
  • Coram: Justice Alok Mathur
  • Decision Date: 8 November 2023
  • Disposal Nature: Disposed of with directions to renew GST licence

Link to Download the Order

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