GST Registration Cancellation Quashed Due to Compliance and Undertaking

Case Title: Kirtidan Samarthdan Gadhavi vs. State of Gujarat & Anr.
Court: High Court of Gujarat at Ahmedabad
Petition Number: R/Special Civil Application No. 2362 of 2025
Date of Judgment: 23.04.2025
Category of Dispute: GST Registration Cancellation
Relevant Sections: Section 29(2)(c) of CGST Act, 2017; Rule 22(1) of CGST Rules, 2017
Neutral Citation: 2025:GUJHC:25370-DB

Facts of the Case (Para 3.1 – 3.6)

• The petitioner, proprietor of M/s. Kirtidan Gadhavi, engaged in performing arts, obtained GST registration on 26.10.2017.

• On 09.11.2022, a system-generated SCN under Section 29(2)(c) for cancellation of registration was issued for non-filing of returns for six months; registration was suspended immediately without hearing.

• Petitioner was unaware of the notice as his CA, who handled GST compliance, had left India without informing him. Consequently, an ex-parte cancellation order was passed on 16.02.2023 w.e.f. 31.03.2022.

• Petitioner later cleared all dues: ₹32,12,410 GST, ₹5,28,902 interest, and ₹2,96,000 late fees. He sought restoration citing absence of reasons in SCN and placed reliance on Aggrawal Dyeing and Printing Works v. State of Gujarat (2022).

Questions in Consideration (Para 4 & 5)

1. Whether cancellation of GST registration without proper reasoning and hearing was valid under Section 29(2)(c).

2. Whether compliance by paying all dues with interest and fees can justify restoration of registration.

3. Whether repeated defaults by the petitioner disentitled him from relief.

Observations of the Court (Para 6)

• Petitioner indeed failed in compliance, warranting cancellation under Section 29(2)(c).

• However, since all dues were cleared with interest and penalty, and petitioner showed willingness to file an undertaking for future compliance, restoration deserved consideration.

• Authorities are directed to ignore past defaults once revocation application is filed and decide afresh in law.

Judgment of the Court (Para 7 – 9)

• Petition allowed.

• SCN dated 09.11.2022 and cancellation order dated 16.02.2023 quashed.

• Petitioner to file revocation application within four weeks. Authorities to decide without being influenced by past defaults.

• Petitioner directed to file undertaking to be regular in compliance and deposit ₹5,000 with Gujarat State Legal Services Authority.

Between Fine Lines (Simple Summary)

1. GST registration was cancelled for repeated non-filing of returns.

2. Petitioner cleared all dues with interest and late fees.

3. Court recognized past defaults but gave relief considering compliance and undertaking.

4. SCN and cancellation order quashed.

5. Registration to be restored subject to fresh revocation application and compliance assurance.

Summary of Referred Cases