Kallol Ghosh vs. Union Of INDIA And Ors.
Original PDF →Facts
The petitioner, Kallol Ghosh, filed a writ petition challenging an order dated July 9, 2025, which cancelled their GST registration. The petitioner was issued a show cause notice on May 24, 2025, for not furnishing returns under Section 39 of the CGST Act, 2017, and was directed to appear on June 20, 2025. The registration was cancelled due to the non-submission of a reply to the show cause notice. The petitioner explained that their consultant's failure to file returns was due to the consultant's wife's illness. The writ petition was filed on March 12, 2026, with the petitioner expressing a desire to continue business operations.
Held
The Court held that the cancellation of registration solely for non-filing of returns, when there was no attempt to evade tax, and considering the petitioner's desire to continue business, which would ultimately benefit revenue collection, warranted intervention. The Court found the petitioner's explanation for non-compliance, attributing it to the consultant's personal circumstances, to be plausible given the socio-economic context and computer literacy levels. The Court reasoned that suspending or revoking registration would be counterproductive, preventing the petitioner from raising invoices and impacting tax recovery. Therefore, the Court decided to set aside the cancellation order, subject to the petitioner fulfilling certain conditions. The ratio is that a pragmatic approach should be taken in cases of procedural lapses leading to registration cancellation, especially when it hinders business and revenue generation, provided the assessee is willing to rectify the default.
Key Issues
1. Whether the cancellation of GST registration for non-filing of returns, without any allegation of tax evasion, warrants intervention by the High Court on an urgent basis, considering the petitioner's intent to continue business operations and generate revenue for the State? (Mixed question of law and fact, concerning the principles of natural justice and the purpose of GST registration). The petitioner argued that the cancellation was due to a consultant's failure, not tax evasion, and that continuing business is essential for revenue generation. The respondents raised an objection that the matter was not urgent. The Court considered the petitioner's intent to carry on business and the impact on revenue realization as grounds for urgency.
Sections Cited
Section 39
AI-generated summary — verify with the full judgment below
2026
sayandeep Sl. No. ADSL 01 Ct. No. 03 Kallol Ghosh Vs. The Union of India & ors.
Ms. Sweta Mukherjee
Ms. Sakshi Bagaria
Ms. Sarmistha Dutta …. for the petitioner
Mr. Vipul Kundalia, Sr. adv.
Mr. Anurag Roy
Mr. Anindya Karan
….. for the CGST authorities
This matter was mentioned and has accordingly been listed. An objection has, however, been raised by the learned senior advocate representing the respondents that the matter is not urgent and as such should not be taken up for consideration by this Court.
By the writ petition, the petitioner seeks to challenge the order cancelling the registration of the petitioner dated 9th July, 2025. I find that the writ petition has been filed on 12th March, 2026. In this context, it may be relevant to note that the petitioner at this stage, has approached this Court, inter alia, contending that the petitioner is interested to continue with the business operations. From a perusal of the materials on record, it would transpire that the petitioner was served with a show cause on 24th May, 2025 as to why the petitioner’s registration shall not be cancelled for reasons of the petitioner not furnishing the returns under Section 39 of the CGST Act, 2017. The show cause further proceeds to direct the petitioner to appear before the juri ictional officer on 20th June, 2025 and explain the circumstances relating to non-filing of the returns.
Records would also reveal that the order of cancellation of registration was passed inasmuch as no reply to the show-cause notice was submitted. The petitioner, however, in the writ petition has explained that the petitioner being ignorant about the statutory compliance and being dependent on the consultant, and since the consultant had failed to file the compliance due to his wife’s illness, in timely manner, had suffered the consequences. Considering the socio-economic scenario and computer literacy of this country, the explanation appears to be plausible.
On the issue of urgency involved in the matter, I find that the petitioner has approached this Court with the intent to carry on business. It is not in dispute that the registration of the petitioner was cancelled only on the ground of non-filing of return and not on the ground that the petitioner was attempting to evade tax. It is also not in dispute that unless the petitioner is in a position to get himself registered, the petitioner cannot do business following which no revenue can be generated for the State. In my view, non realization of revenue for the State is enough ground for the Court to take up such matter on urgent basis.
Taking note of the peculiar facts and that the suspension/revocation of registration would be counter productive and works against the interest of revenue since the petitioner in such case would not be able to carry out business in a sense that no invoice can be raised by the petitioner and ultimately would impact recovery of tax, I am of the view that the respondents should take a pragmatic view in the matter and permit the petitioner to carry on business.
Having regard thereto, I proposed to set aside the order dated 9th July, 2025 subject to condition that the petitioner files the returns for the entire period of default and pays requisite amount of tax, interest, penalty and fine as may be applicable.
It is made clear that that if the petitioner complies with the conditions noted hereinabove within 4 weeks from date of receipt of the server copy of the order, the petitioner’s registration under the said Act shall be restored by the juri ictional officer. However, if the petitioner fails to comply with the direction as aforesaid, the benefit of this order will not enure to the petitioner and the writ petition would stand automatically dismissed.
For the purpose of compliance of the above direction, the respondents are directed to activate the petitioner’s portal and log in credentials within one week from date so that the petitioner can file its returns, pay requisite amount of tax, interest, fine and penalty.
With the above observations and directions, the writ petition is disposed of.
(Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.