Adil Lateef Shah vs. Union Territory Of J And K And Another (Sales Tax)

Held

The High Court disposed of the petition by directing the petitioner to approach the competent authority for the restoration of his GST registration within seven days. The competent authority was directed to restore the registration immediately, subject to the completion of all requisite formalities. The petitioner was further directed to file all pending returns and deposit the taxes and penalty along with interest within seven days of the restoration of registration. The Court held that if these conditions were not met within the stipulated period, the order would cease to be operational, and the respondents would be entitled to withdraw the restored registration. The reasoning was based on established practice in similar cases where restoration was granted conditionally. The ratio decidendi is that the High Court can direct the restoration of a cancelled GST registration, provided the petitioner undertakes to comply with all statutory obligations regarding tax payment and filing of returns, thereby balancing the revenue's interest with the assessee's right to carry on business.

Facts

The petitioner, Adil Lateef Shah, had his GST registration cancelled by the State Taxes Officer, Circle Budgam and Kashmir, on August 17, 2024, following a show cause notice issued on July 14, 2024, to which no reply was filed. The petitioner invoked Article 226 of the Constitution of India seeking restoration of his registration. The High Court noted that similar cases had been decided by directing restoration of registration subject to the petitioner depositing tax and penalty along with interest. The respondents had previously conceded to restoring registration for defaulting dealers who complied with filing returns and depositing dues. The Court referred to a previous order dated December 17, 2025, in WP(C) 3156/2025.

Key Issues

1. Whether the petitioner's GST registration, cancelled due to non-response to a show cause notice, can be restored by the High Court under Article 226 of the Constitution of India, considering the provisions of the Goods & Services Tax Act, 2017. Petitioner's contention: The petitioner sought restoration of his registration, relying on previous High Court orders in similar cases where registration was restored subject to compliance with tax and penalty obligations. The petitioner implicitly argued for a lenient approach based on precedent. Revenue's contention: The respondents (Union Territory of J and K and Another) did not present any arguments as they were represented by 'None'. However, the judgment indicates a prior concession from the respondents in similar matters to restore registration upon compliance.