The Calcutta High Court has directed the restoration of a farmer producer company’s GST registration after holding that denying an opportunity to regularise compliance would cause irreparable harm to its business and the livelihood of farmers associated with it.
The bench of Justice Smita Das De has observed that balanced statutory compliance with equitable considerations by permitting restoration subject to payment of applicable taxes, interest and penalties.
The writ petition was filed challenging the suspension and cancellation of its GST registration on account of continuous non-filing of monthly GST returns. The petitioner sought restoration of its registration to continue its business operations.
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The company informed the Court that it had been incorporated to support marginal farmers by facilitating the marketing of agricultural produce, particularly paddy. It submitted that compliance was affected due to the peak agricultural season coupled with the unavailability of its appointed GST practitioner.
The petitioner further contended that its business predominantly dealt with exempt agricultural goods and, therefore, the failure to file returns had not resulted in any loss of revenue to the State exchequer. According to the company, the lapse was merely procedural and technical rather than substantive.
It also challenged the cancellation order as a non-speaking and perverse order, arguing that the authorities failed to properly consider its detailed representation dated 20 January 2026 before passing the impugned decision. The company expressed its willingness to pay all taxes, interest and penalties that may be determined and assured the Court that it would file returns regularly in future.
Opposing the writ petition, the State argued that the prolonged default in filing monthly GST returns could not be condoned. It relied upon Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, which mandates cancellation of GST registration where a registered person fails to furnish returns for a continuous period of six months. According to the State, the petitioner had admittedly violated the statutory requirement and the cancellation was legally justified.
After considering the submissions of both parties, Justice Smita Das De observed that the petitioner had established a prima facie case warranting judicial interference. The Court held that a complete denial of the opportunity to file pending returns after payment of statutory dues would cause irreparable loss to the petitioner’s business and livelihood.
Recognising the need to balance statutory compliance with equitable relief, the Court directed the concerned GST authorities to compute the taxes, interest and penalties payable by the petitioner. Upon payment and satisfaction of the statutory dues, the authorities were directed to restore the GST registration with effect from the original date of registration and permit the petitioner to file pending and future returns regularly.
The High Court further directed that the GST portal should remain active for the limited purpose of enabling the petitioner to make payment of taxes and penalties necessary for restoration of registration. The writ petition was accordingly disposed of.
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