M R Construction Company And Anr. vs. Union Of INDIA And Ors.
Original PDF →Facts
The petitioners, M R Construction Company & Anr., filed a writ petition challenging an order dated December 14, 2023, which cancelled their GST registration. The cancellation was based on the ground of non-furnishing of returns, as per Section 39 of the GST Act. The petitioners expressed their willingness to continue their business, comply with the Act's provisions, and pay any outstanding tax, interest, penalty, and fine. The respondents are the Union of India and other authorities. The court noted that the petitioners were not involved in any dubious tax evasion practices and that cancellation of registration would be counterproductive to revenue collection as it would prevent the petitioners from raising invoices and impacting tax recovery.
Held
The Court held that the cancellation of GST registration solely on the ground of non-furnishing of returns, especially when the petitioner is willing to comply and pay dues, is counterproductive to revenue interests. The reasoning was that suspending or revoking registration prevents the petitioner from conducting business, raising invoices, and consequently impacts the recovery of tax. The Court found it pragmatic to allow the petitioner to continue their business. The order of cancellation dated December 14, 2023, was set aside, subject to the condition that the petitioners file all pending returns and pay the applicable tax, interest, penalty, and fine within four weeks. The Jurisdictional Officer is directed to restore the registration upon compliance. If the petitioners fail to comply, the writ petition stands automatically dismissed. The respondents are directed to activate the petitioner's portal and login credentials within one week to facilitate compliance.
Key Issues
1. Whether the cancellation of GST registration on the ground of non-furnishing of returns, without any allegation of tax evasion, is a pragmatic approach, considering its impact on revenue collection? (Mixed question of law and fact, concerning Section 39 of the GST Act). Petitioner's contention: The petitioner argued that they are willing to comply with the provisions of the GST Act and pay all outstanding dues, including tax, interest, penalty, and fine. They submitted that continuing their business would be beneficial for revenue collection, as cancellation would prevent them from raising invoices and thus hinder tax recovery. Revenue's contention: The judgment does not record any specific arguments made by the respondents (Revenue) other than their role in issuing the cancellation order. However, their implicit contention is that the cancellation was justified due to the non-furnishing of returns.
Sections Cited
Section 39
AI-generated summary — verify with the full judgment below
19 22.09.2025 Saswata Ct.
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE M R Construction Company & Anr. Versus The Union of India & Ors.
Mr. Himangshu Kumar Ray Ms. Shiwani Shaw Mr. Gaurav Chakraborty Mr. Sushant Bagaria … For the petitioners Mr. Shiv Shankar Banerjee Ms. Sretapa Sinha … For the respondents
Affidavit of service filed in Court today is retained with the record.
Challenging the order of cancellation dated 14th December 2023 passed under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), the instant writ petition has been filed.
Today, Mr. Ray, 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.
I find in this case that the registration of the petitioners 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 petitioners in such case would not be able to carry on his business in the sense that no invoice can be raised by the petitioners 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 14th December 2023, subject to the condition that the petitioners file 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 petitioners comply with the directions/conditions noted above within four weeks from date of receipt of the server copy of this order, the petitioners’ registration under the said Act shall be restored by the Juri ictional Officer. However, if the petitioners fail to comply with the directions as aforesaid, the benefit of this order will not enure to the petitioners and the writ petition would stand automatically dismissed.
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.
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.