M/S. Gayathri Infra Developers vs. Deputy State Tax Officer

Held

The Court allowed the writ petition, setting aside the impugned order of GST registration cancellation dated August 26, 2024. The Court directed the petitioner to file a fresh petition before Respondent No. 1 for reviving the GST registration, subject to the petitioner depositing the late fees, fine, or penalty. The Court reasoned that the sole deficiency of not uploading bank account details might not be grave enough to warrant cancellation. It also noted the vagueness of the show cause notice and the lack of proof of effective service. The Court adopted a pragmatic approach, stating that restoring the registration, subject to payment of dues, would benefit both the petitioner by allowing business revival and the Department by generating revenue. This approach was deemed to be in the larger economic interest. The Court found that cancelling registration would not benefit the State, whereas restoration coupled with payment of dues would benefit all stakeholders.

Facts

The petitioner, M/s. Gayathri Infra Developers, filed a writ petition challenging the cancellation of its GST registration by the Deputy State Tax Officer (Respondent No. 1) on August 26, 2024, effective July 12, 2023. The cancellation was based on alleged violations of Rule 21(d) and Rule 10A (Bank details) of the CGST Act. The petitioner's appeal to the Appellate Joint Commissioner (Respondent No. 2) was rejected on October 10, 2025. The petitioner claimed the failure to upload bank details was due to ignorance and lack of awareness, compounded by financial losses that hindered business operations. The petitioner also stated that a fresh revocation application could not be filed via the GST portal.

Key Issues

1. Whether the cancellation of the petitioner's GST registration by the first respondent, and the subsequent rejection of the appeal by the second respondent, were illegal, arbitrary, and contrary to law, particularly in light of the petitioner's alleged ignorance and financial difficulties, and in contravention of Article 19(1)(g) of the Constitution of India and the provisions of the CGST and Telangana GST Acts? Petitioner's arguments: The lapse in uploading bank details was unintentional and due to ignorance. The petitioner intended to revive the business and sought an opportunity to rectify the default by paying any required fines or penalties. The GST portal did not permit filing a fresh revocation application. The cancellation of registration would cause severe loss and hardship. Respondents' arguments: The petitioner failed to complete the required formalities, including uploading bank details, even after obtaining registration. The petitioner did not respond to the show cause notice, leaving the Department with no option but to cancel the registration due to continuous default.