M/S Peul Enterprise vs. Union Of INDIA And Ors.

WPA/17370/2025HC CalcuttaGSTCNR WBCHCA035230202517 February 2026Bench: HON'BLE JUSTICE OM NARAYAN RAI3 pages

AI SummaryPartly Allowed

Facts

The petitioner, M/s Peul Enterprise, filed a writ petition challenging an order dated March 28, 2025, passed by the Appellate Authority under Section 107 of the CGST Act, 2017/WBGST Act, 2017. This appellate order dismissed the petitioner's appeal against an earlier order dated March 14, 2023, which had cancelled the petitioner's GST registration. The cancellation was solely on the ground of failure to furnish returns for a continuous period of six months. The revenue did not allege any fraudulent or evasive transactions, dubious activities, or suppression of information by the petitioner. The petitioner expressed willingness to continue business, file all pending returns, and pay all applicable taxes, costs, charges, late fees, penalties, and interest to have their registration restored.

Held

The Court held that the cancellation of the petitioner's GST registration, based solely on the failure to furnish returns for six months, without any allegations of fraud, evasion, or dubious activities, was a matter that could be rectified. The Court reasoned that not restoring the registration would adversely affect the petitioner and also result in a loss of revenue to the State. Drawing inspiration from a Division Bench order in Subhankar Golder vs. Assistant Commissioner of State Tax, Serampore Charge & Ors., the Court decided to grant the petitioner one more opportunity. The order of cancellation of registration was set aside, subject to the petitioner filing all pending returns and paying all leviable taxes, costs, charges, interest, fine, penalty, and late fees within four weeks. The Jurisdictional Assessing Officer was directed to activate the petitioner's portal and login credentials within a week to facilitate compliance. The Court clarified that failure to comply with these conditions would result in the writ petition being automatically dismissed and the cancellation order being revived. The order dated March 28, 2025, was set aside.

Key Issues

1. Whether the cancellation of GST registration solely for failure to furnish returns for six months, without any allegations of fraud or evasion, warrants restoration upon the petitioner's willingness to regularize their compliance? (Mixed question of law and fact, turning on the interpretation and application of provisions related to registration cancellation and restoration under the CGST Act, 2017). Petitioner's contention: The petitioner argued that they are willing to file all pending returns and pay all dues, including taxes, penalties, interest, and late fees, to regularize their compliance. They submitted that the cancellation was only due to non-filing of returns and not due to any fraudulent or evasive activities, and that restoration would benefit both the petitioner and the State by ensuring continued tax revenue. Revenue's contention: The judgment does not record any specific arguments made by the revenue or the respondents.

Sections Cited

Section 107

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side Ct.551 17.02.26 D/L. Item No.06 (Samar) WPA 17370 2025 M/S Peul Enterprise Vs The Union of India & Ors. The Union of s Mr. Chittapriya Ghosh, Mr. Somesh Kumer Ghosh, Ms. Tulika Bag, …for the petitioner. Mr. Sujit Bhunia, … for the UOI. Mr. Bhaskar Prasad Banerjee, Mr. Abhradip Maity, … for the respondents. 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 2 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 3 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.

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.

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

(Om Narayan Rai , 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.