Azaria corp LLP Vs Deputy Commissioner of State Tax (Bombay High Court)
GST Restoration Allowed by Bombay HC: Dues Cleared, Delay Bona Fide, ₹50K CSR Cost Imposed: The Bombay High Court ordered the restoration of a firm’s cancelled GST registration after it paid all outstanding dues, interest, and late fees, accepting the delay was bona fide. The court imposed an additional ₹50,000 cost payable to a hospital under Corporate Social Responsibility (CSR).
The Bombay High Court has directed the conditional restoration of the Goods and Services Tax (GST) registration of Azaria Corp LLP, which was cancelled due to the failure to file returns. The Court ruled that since the petitioner had subsequently paid all outstanding GST dues, interest, and late fees, continuing the cancellation would be disproportionate and contrary to the interests of both the business and the Revenue Department.
The Grounds for Cancellation and Restoration
The petitioner’s GST registration was cancelled by the Deputy Commissioner of State Tax on January 5, 2023, due to the non-filing of returns. However, the petitioner subsequently cleared all liabilities, providing evidence of the following payments:
- ₹16,46,186 towards the outstanding GST due, paid in June 2024.
- ₹6,27,935 towards interest and late fees.
The petitioner’s counsel argued that the delay in filing returns was due to bona fide reasons and that maintaining the cancellation would disable the firm from conducting business, resulting in a loss of future GST revenue for the State, thus defying the doctrine of proportionality.
