Facts of the Case:

In this case, challenged an order passed by the Appellate Authority under Section 107, whereby the appeal against cancellation of GST registration was dismissed. The registration had been cancelled solely on the ground that the petitioner failed to furnish returns for a continuous period of six months.

Before the Court, the petitioner submitted willingness to resume business operations and undertook to file all pending returns for the entire default period and to pay all applicable taxes, interest, penalty, late fees, and other statutory dues. It was not the case of the revenue that the petitioner was involved in fraud, tax evasion, suppression of facts, or any dubious transaction. The show cause notice and cancellation order did not contain any allegation of fraudulent conduct.

Issue:

Whether cancellation of GST registration for non-filing of returns, in the absence of any allegation of fraud or tax evasion, could be set aside subject to compliance conditions, thereby granting the petitioner an opportunity to regularize defaults.

Held that:

The Court observed that since the cancellation was based solely on non-filing of returns and not on any allegation of fraud or tax evasion, denial of restoration would adversely affect both the petitioner’s business and the State’s revenue. Relying on the Division Bench decision in Subhankar Golder v. Assistant Commissioner of State Tax, Serampore Charge, the Court granted one final opportunity to the petitioner.

Accordingly, the Court set aside and directed that the cancellation order shall stand set aside subject to the petitioner filing all pending returns for the default period. The petitioner shall pay all taxes, interest, penalty, late fees, and other applicable dues.  Upon compliance, the registration shall be restored. The Jurisdictional Assessing Officer shall activate the petitioner’s GST portal and login credentials within one week to enable compliance.

Case Name: M/s. Peul Enterprise Versus The Union of India & Ors. dated 17.02.2026