High Court Directs Restoration of GST Registration on Compliance with Conditions

The petitioner approached the Court after the cancellation of its GST registration and dismissal of the appeal. The grievance raised was that the petitioner was unable to file returns due to difficulties in accessing the portal. When the matter was taken up, the petitioner submitted before the Court that it was willing to regularise its position by filing all pending returns and paying the late fees as may be determined by the authority. The Court took note of this statement and recorded the petitioner’s undertaking that the entire compliance would be completed within the time allowed. The Court further noted that the petitioner had shown readiness to bear the financial liability arising from such non-compliance and assured the Bench that there would be no delay once the relief of restoration was granted.

Issue Raised: Whether cancellation of GST registration should be sustained despite the petitioner’s undertaking to file pending returns and pay late fees.

HC’s Ruling: The Court noted that after the petitioner came forward with a commitment to file all the pending returns and pay the late fees as calculated by the authority, the premise for the cancellation no longer existed. It was held that cancellation is a measure intended to ensure compliance, and when the petitioner voluntarily accepts discharge of the liability, continuation of such cancellation would operate as an excessive penalty and prevent the petitioner from conducting business lawfully. Thus, the Court found it just to balance the equities by giving the petitioner a chance while preserving the revenue‘s interest through the assurance of paying dues in full prior to restoration.

The Court told that after paying the late fees within the time specified and completing the filing of returns, the respondent authority will process the request of the petitioner and pass orders for restoration of registration in accordance with law. It was also ordered that such restoration will not be delayed and must be done within a reasonable time on compliance. Through these orders, the Court granted the writ petition, cancelled the effects of cancellation, and released the notice. Direct service via e-mail was allowed to permit compliance to be made without procedural delay.

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