M/S Ab And Bb Construction vs. Assistant Commissioner Of Revenue, State Tax, Baruipur Charge And Ors.
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The petitioner, M/s AB and BB Construction, filed a writ petition challenging an order dated September 17, 2021, passed by the Assistant Commissioner of Revenue, State Tax, Baruipur Charge, cancelling their GST registration. The cancellation was based on the ground of non-furnishing of returns under Section 39 of the WB GST/CGST Act, 2017. The petitioner expressed willingness to continue their business and comply with the Act's provisions, including paying outstanding tax, interest, penalty, and fine. The respondents are the Assistant Commissioner of Revenue and other authorities of the State Tax department.
Held
The Court held that the order of cancellation of the petitioner's GST registration dated September 17, 2021, should be set aside. The Court reasoned that the petitioner had not engaged in any dubious process to evade tax, and the cancellation of registration would be counterproductive to the revenue's interest. This is because a cancelled registration prevents the petitioner from conducting business, raising invoices, and ultimately impacts the recovery of tax. The Court found that a pragmatic view was necessary, allowing the petitioner to continue their business. The ratio decidendi is that if a taxpayer is willing to rectify past defaults and comply with statutory obligations, and if the cancellation of registration would harm revenue collection, the authorities should consider restoration of registration. The Court directed the petitioner to file all pending returns and pay the applicable tax, interest, penalty, and fine within four weeks. Upon compliance, the Jurisdictional Officer is to restore the petitioner's registration. If the petitioner fails to comply, the writ petition stands automatically dismissed. The respondents were also directed to activate the petitioner's portal and login credentials within one week to facilitate compliance.
Key Issues
1. Whether the order of cancellation of GST registration dated September 17, 2021, passed under the WB GST/CGST Act, 2017, is sustainable in law, considering the petitioner's willingness to comply with statutory obligations? (Question of law and fact, turning on Section 39 of the WB GST/CGST Act, 2017). Petitioner's contention: The petitioner argued that they are willing to comply with the provisions of the said Act and pay all outstanding dues, including tax, interest, penalty, and fine. They submitted that the cancellation of registration would be counterproductive and against the interest of revenue as it would prevent them from carrying on business and raising invoices, thereby impacting tax recovery. Revenue's contention: The judgment does not explicitly record any arguments made by the revenue or State. However, the order of cancellation was issued by the Assistant Commissioner of Revenue, State Tax, Baruipur Charge, on the ground of non-furnishing of returns.
Sections Cited
Section 39
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16 06.08.2025 Saswata Ct.
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE M/s AB and BB Construction Versus Assistant Commissioner of Revenue, State Tax, Baruipur Charge & Ors.
Mr. Akash Chakraborty
Mr. Rishav Manna
… For the petitioner
Mr. Amitabrata Roy, Ld. GP
Mr. Tanoy Chakraborty
Mr. Saptak Sanyal
… For the State.
Challenging the order of cancellation dated 17th September, 2021 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. Chakraborty, 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 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 its business.
Having regard to the aforesaid, I propose to set aside the order of cancellation dated 17th September 2021, 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.
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.