Tera Software Limited vs. Principal Commissioner CGST And Cx, Bidhannagar Div, Kol (N) Commissionerate And Ors.
Original PDF →Facts
The petitioner, Tera Software Limited, filed a writ petition challenging the order dated October 6, 2020, which cancelled its GST registration. The cancellation was based on the ground of non-furnishing of returns, as per Section 39 of the WBGST/CGST Act, 2017. The petitioner expressed its willingness to continue the business and comply with the Act's provisions, including payment of outstanding tax, interest, penalty, and fine. The respondents are the Principal Commissioner, CGST & CX, Bidhannagar Division, Kolkata North Commissionerate, and others. The judgment also notes that an appellate order dated June 25, 2024, rejecting the appeal, was set aside.
Held
The Court held that the cancellation of the petitioner's GST registration on the ground of non-furnishing of returns was not appropriate, especially since it was not a case of the petitioner adopting dubious means to evade tax. The Court reasoned that suspending or revoking registration would be counterproductive and against the interest of revenue, as it would prevent the petitioner from carrying on business, raising invoices, and ultimately impact tax recovery. Therefore, the Court decided to set aside the order of cancellation dated October 6, 2020, and the appellate order dated June 25, 2024. The petitioner's registration would be restored by the Jurisdictional Officer, subject to the condition that the petitioner files all pending returns for the period of default and pays the applicable tax, interest, penalty, and fine within four weeks of receiving the server copy of the order. The Court directed the respondents to activate the petitioner's portal and login credentials within one week to facilitate compliance. If the petitioner fails to comply, the writ petition would stand automatically dismissed.
Key Issues
1. Whether the cancellation of GST registration for non-furnishing of returns, under Section 39 of the WBGST/CGST Act, 2017, is justified when the petitioner is willing to comply with all statutory obligations and continue business operations? The petitioner argued that it is interested in continuing its business and is prepared to fulfill all its obligations under the Act, including paying any outstanding tax, interest, penalty, and fine. The petitioner contended that the cancellation of registration would be counterproductive and detrimental to revenue collection as it would prevent the petitioner from raising invoices and consequently impact tax recovery. The revenue authority's argument is not explicitly recorded in the judgment, but the cancellation order was issued due to non-furnishing of returns.
Sections Cited
Section 39
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24.09.2025 (Pritam)
Ct.
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 25086 of 2024
Tera Software Limited. Versus Principal Commissioner, CGST & CX, Bidhannagar Division, Kolkata North Commissionerate & Ors.
Mr. Rajarshi Chatterjee.
… For the petitioner.
Mr. Bhaskar Prosad Banerjee,
Mr. Tapan Bhanja.
....For the CGST Authority.
Affidavit of service filed in Court is taken on record.
Challenging the order of cancellation of registration dated October 6, 2020 passed under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), the instant writ petition has been filed.
Learned advocate appearing in support of the writ petition would submit that the petitioner is interested to continue with the business and is agreeable to comply with the provisions of the said Act and to pay the outstanding tax, interest, penalty and fine as may be applicable.
Having heard the learned advocates appearing for the respective parties, it would transpire that pursuant to a show cause notice, the aforesaid order of cancellation of registration was issued on the ground of non-furnishing of returns under Section 39 of the said Act.
2
I find in this case that the registration of the petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the respondents that the petitioner had been adopting dubious process to evade tax. Taking note of the fact that the suspension/revocation of registration would be counterproductive and works against the interest of the revenue since, the petitioner in such case would not be able to carry on his business in the 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 his business.
Having regard to the aforesaid, I propose to set aside the order of cancellation dated October 6, 2020 subject to the 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 if the petitioner complies with the directions/conditions noted above within four weeks from date of receipt of the server copy of this 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 directions as aforesaid, the benefit of this order will not enure to the petitioner and the writ petition would stand automatically dismissed.
3
For the purpose of compliance of the above directions, the respondents are directed to activate the petitioner’s portal and login credentials within one week from date so that the petitioner can file his returns, pays requisite amount of tax, interest, fine and penalty.
As a sequel thereto, the appellate order dated June 25, 2024 rejecting the appeal is also set aside.
With the above observations and directions, the writ petition is disposed of.
Parties shall act on the basis of the server copy of this order duly downloaded from the official website of this Hon’ble Court.
Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
(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.