Facts of the Case

The petitioner challenged an order dated 10.01.2023 passed by the second respondent cancelling the petitioner's GST registration. Counsel for the petitioner submitted that the registration had been cancelled on account of default in payment of Goods and Services Tax, and that the petitioner was ready and willing to deposit the entire outstanding dues and make a representation to the department seeking revocation of the cancellation order. The learned Standing Counsel for the State accepted notice on behalf of the respondents and, on instructions, stated that if the petitioner deposited all dues along with penalty and made a representation, the same would be considered by the department. The Court recorded this statement and disposed of the petition accordingly.

Issues Involved

  1. Whether a writ petition challenging cancellation of GST registration for default in tax payment could be disposed of on the petitioner's undertaking to clear the dues and seek revocation departmentally, rather than through adjudication on merits.

Petitioner's Arguments

  • The registration was cancelled solely due to default in payment of GST dues.
  • The petitioner was ready and willing to deposit all outstanding tax dues, along with any applicable penalty, and to make a representation for revocation of the cancellation order.

Respondent's Arguments

  • The State's Standing Counsel submitted that if the petitioner deposited all dues, including tax and penalty, and made a representation seeking revocation, the department would consider it.

Court Order/Findings

  • The Court took the respondents' statement on record.
  • The petitioner was granted liberty to deposit all dues, including tax and penalty, and to make a representation to the respondent authorities within a week, with the department directed to consider the same.
  • With these observations, the writ petition was disposed of without an adjudication on the merits of the cancellation order.

Important Clarification

  • Where a GST registration has been cancelled for default in payment and the taxpayer is willing to clear the outstanding dues and penalty, courts commonly dispose of the challenge by directing the taxpayer to deposit the dues and make a representation for revocation, leaving the department to consider it on merits rather than deciding the cancellation dispute itself.
  • Such a disposal does not amount to a finding that the original cancellation was invalid; it merely creates a departmental pathway for revocation conditional on payment of dues.

Sections Involved

  • Section 29, CGST Act 2017 — cancellation of registration, including for default in payment of tax.
  • Section 30, CGST Act 2017 — revocation of cancellation of registration.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee, granting a fresh opportunity to seek revocation of the cancelled registration on depositing the outstanding dues and penalty; the Court did not rule on the validity of the original cancellation.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Uttarakhand at Nainital
  • Case No.: WPMS No.3154 of 2023
  • CNR: Not available
  • Coram: Justice Rakesh Thapliyal
  • Decision Date: 09-11-2023
  • Disposal Nature: Disposed of, liberty to deposit dues and seek revocation

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