5Th Bn Police Subsidiary Canteen vs. The Superintendent, CGST And Cx, Range-Ii, Bidhannagar Division And Ors.
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The petitioner, 5th BN Police Subsidiary Canteen, filed a writ petition challenging the order dated 22nd May, 2024, 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 paying outstanding tax, interest, penalty, and fine. The court noted that the cancellation was solely for non-filing of returns and not due to any tax evasion practices by the petitioner. The court also considered that revoking registration could be counterproductive to revenue collection as the petitioner would be unable to raise invoices.
Held
The Court held that the cancellation of registration solely for non-furnishing of returns, when the petitioner is willing to comply and pay dues, is counterproductive to revenue interests. The Court found that the petitioner was not engaged in dubious practices to evade tax. Therefore, the order of cancellation of registration dated 22nd May, 2024, was set aside. Consequently, the order rejecting the application for revocation of cancellation dated 11th July, 2024, and the appellate authority's order dated 28th March, 2025, were also set aside. The Court directed the petitioner to file all pending returns and pay the requisite tax, interest, penalty, and fine within four weeks of receiving the order. Upon compliance, the Jurisdictional Officer is to restore the petitioner's registration. Failure to comply will result in the dismissal of the writ petition. The respondents were directed to activate the petitioner's portal within one week to facilitate compliance.
Key Issues
1. Whether the cancellation of GST registration on the sole ground of non-furnishing of returns, without any allegation of tax evasion, is justified under the WBGST/CGST Act, 2017? 2. Whether the Court should permit the petitioner to continue its business and have its registration restored, subject to compliance with statutory obligations? The petitioner argued that it was willing to comply with all provisions of the Act, including filing all pending returns and paying any dues. The petitioner contended that continuing the business would ultimately benefit the revenue by enabling tax collection. The revenue, represented by the Superintendent, CGST & CX, did not appear to have raised any specific counter-arguments against the petitioner's willingness to comply, as the court's decision was based on the petitioner's submissions and a pragmatic view of revenue interests.
Sections Cited
Section 39
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Cause title — parties, addresses and appearances
order of cancellation of registration dated 22nd May, 2024 passed under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), the instant writ petition has been filed.
Today, Ms. Kundu, 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 petitioner had been cancelled on the ground of non-filing of returns. It is not the case of the petitioner 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 22nd May, 2024 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. As a consequence thereof, the order of rejection of application for revocation of cancellation of registration dated 11th July, 2024 and the order passed by the appellate authority dated 28th March, 2025 also stand set aside.
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.
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.