Calcutta High Court Mandates Conditional Restoration of GST Registration Subject to Clearance of Pending Returns

The suspension or revocation of a business's Goods and Services Tax (GST) registration essentially brings its commercial operations to a standstill. In a significant judicial intervention, the Calcutta High Court recently adjudicated on the severe civil consequences that arise when an assessee is stripped of their GST registration due to compliance defaults. In the landmark writ petition of Basudev Karmakar Vs Superintendent of CGST & CX, the Court evaluated the balance between strict statutory compliance and the fundamental right of an assessee to conduct business.

The judicial forum ultimately ruled in favour of the assessee, directing the revenue authorities to revoke the cancellation order dated 22.10.2024. This relief, however, was not absolute; it was strictly contingent upon the assessee clearing all outstanding compliance obligations, including the filing of GSTR-1 and GSTR-3B returns, alongside the remittance of all associated statutory dues.

Factual Matrix of the Dispute

The legal controversy originated when the jurisdictional GST authorities initiated punitive action against the petitioner, who operates as the sole proprietor of M/s Eastern Security Services.

The Genesis of the Default

The assessee had failed to submit the mandatory periodic returns—specifically GSTR-3B and GSTR-1—for a continuous stretch of six months. Consequently, the revenue department issued a show-cause notice utilizing Form REG 17, demanding an explanation for the prolonged non-compliance. Following this administrative procedure, the department issued a formal order on 22.10.2024, abruptly cancelling the GST registration of the proprietary concern.