Peul Enterprise Vs Union of India & Ors. (Calcutta High Court)
The Calcutta High Court set aside an appellate order dated March 28, 2025, which had upheld cancellation of the petitioner’s GST registration under Section 107 of the CGST Act, 2017/WBGST Act, 2017. The original cancellation order dated March 14, 2023 was passed solely on the ground that the petitioner had failed to furnish returns for a continuous period of six months.
Before the Court, the petitioner submitted that it was willing to continue its business and undertake full compliance by filing returns for the entire period of default and paying all applicable taxes, costs, charges, late fees, penalty, and interest required for restoration of registration.
The Court noted that the cancellation was based only on non-filing of returns for six months. There was no allegation in the show cause notice of fraudulent transactions, tax evasion, suppression, or any other dubious activity. The cancellation order also contained no such findings. In these circumstances, the Court observed that refusal to restore the registration would not only adversely affect the petitioner but could also result in loss of revenue to the State.
Taking guidance from the Division Bench decision in Subhankar Golder vs. Assistant Commissioner of State Tax, Serampore Charge & Ors., the Court decided to grant the petitioner one more opportunity. It directed that the cancellation order would stand set aside subject to the petitioner filing returns for the entire default period and paying all taxes, costs, charges, interest, fine, penalty, and late fees within four weeks from the date of the order.
Upon compliance, the petitioner’s GST registration shall be restored. The Jurisdictional Assessing Officer was directed to activate the petitioner’s portal and login credentials within one week to enable compliance. The Court clarified that failure to comply within the stipulated time would result in automatic dismissal of the writ petition and revival of the cancellation order.
Accordingly, the appellate order dated March 28, 2025 was set aside and the writ petition was disposed of without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. This writ petition is directed against an order dated March 28, 2025 passed by the Appellate Authority under Section 107 of the CGST Act, 2017/WBGST Act, 2017 (hereafter “the said Act of 2017”) whereby the petitioner’s appeal against an order dated March 14, 2023 thereby cancelling the petitioner’s registration under the said Act of 2017 was challenged.
2. By the said order, the petitioner’s appeal has been dismissed.
3. Mr. Ghosh, learned advocate appearing for the petitioner submits that the petitioner is willing to continue with the business. He further submits that the petitioner is ready and willing to file return in respect of the entire period of default and to pay all taxes, costs, charges, late fees, penalty and interest leviable, imposable and applicable to the petitioner for the purpose of getting the registration restored.
4. It is noticed that the petitioner’s registration has been cancelled only on the ground of failure to furnish return for a continuous period of six months. It is not the case of the revenue that the petitioner has been involved in any fraudulent transaction or any other transaction of the like for the purpose of evasion of tax. There is also no allegation of involvement in any dubious activity or mischief like suppression etc. for evading tax in the notice to show cause and there is no finding in such regard in the order for cancellation of registration.
5. In such view of the matter, this Court is of the considered view that if the petitioner’s registration under GST is not restored, that would not only adversely effect the petitioner but would also cause loss of revenue to the State.
6. Therefore, this court is minded to give the petitioner one more opportunity to get its registration restored. Taking queue from the order of the Hon’ble Division Bench in the case of Subhankar Golder vs. Assistant Commissioner of State Tax, Serampore Charge & Ors. (MAT 639 of 2024 with CAN 1 of 2024) dated April 09, 2024, it is directed that the order of cancellation of registration would stand set aside subject to the condition that the petitioner shall file returns for the entire period of default, pay all the taxes, costs, charges interest, fine, penalty and late fees, as leviable, imposable an applicable in the present case upon the petitioner within a period of four weeks from date.
7. If the petitioner complies with the aforesaid formalities, the petitioner’s registration shall be restored. The Jurisdictional Assessing Officer shall activate the petitioner’s portal and login credentials within a week from date for the purpose of enabling the petitioner to comply with this order.
8. It is clarified that if the petitioner fails to comply with any of the conditions mentioned in this order within the time specified herein, the writ petition shall stand automatically dismissed and the order of revocation of cancellation shall stand revived.
9. Accordingly, the order dated March 28, 2025 stand set aside.
10. WPA 17370 of 2025 stands disposed of. No costs.
11. Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities
