Calcutta High Court Quashes GST Registration Cancellation Over Non-Disclosure of Bank Details: Joydeb Karmakar Vs Union of India & Ors.

Background and Context

The Calcutta High Court recently adjudicated a writ petition filed by an assessee challenging an order dated 16.06.2025 issued by the Superintendent, Balurghat Range, which cancelled his GST registration under the WBGST Act, 2017 / CGST Act, 2017. The cancellation stemmed from the assessee's failure to furnish updated bank account details to the GST authorities. The Court, adopting a compliance-oriented and pragmatic lens, ultimately quashed the cancellation order while laying down a structured framework for the assessee to re-establish his bona fides before the concerned authority.

Facts of the Case

The assessee, at the time of obtaining GST registration, had disclosed a bank account that was jointly held with his elder brother. Subsequently, due to personal differences, the two brothers separated and each opened independent bank accounts. However, this change in banking arrangement was never communicated to the GST authorities.

The non-disclosure triggered a chain of official action:

  1. A letter dated 11.02.2025 was issued by the respondent authority seeking clarification in respect of multiple GST registrations operating under a single joint bank account.
  2. Receiving no response, the authorities proceeded to issue a show cause notice dated 07.03.2025 proposing cancellation of registration under Rule 21 Clause D for non-compliance with Rule 10A of the CGST Rules.
  3. The Order of Cancellation was passed on 16.06.2025.

Compounding matters, the assessee was arrested on 07.03.2025 — the very same date the show cause notice was issued — and remained in judicial custody until he was enlarged on bail on 17.11.2025. He was subsequently acquitted on 03.01.2026. Despite being released on bail, no steps toward revocation of the cancellation were undertaken, and the assessee approached the High Court by way of a writ petition without first availing the appellate remedy available under the statute.

Submissions on Behalf of the Assessee

Counsel for the petitioner advanced the following primary contentions before the Court:

  • The assessee expressed an unequivocal willingness to comply fully with the provisions of the WBGST Act, 2017 / CGST Act, 2017, including payment of all outstanding taxes, applicable interest, late fees, penalties, and fines.
  • Sustaining the cancellation of registration without affording an opportunity for rectification would cause grave prejudice to the assessee's livelihood and inflict undue financial hardship.
  • Reliance was placed on paragraphs 11 to 17 of the judgment of a Coordinate Bench in Kanaklal Sutradhar – Vs.- State of West Bengal reported in (2024) 165 Taxmann.com 468 (Calcutta), which took a compliance-first approach to restoration of cancelled GST registrations.
  • Reliance was also placed on paragraph 11 of the decision in WPA 13801 of 2026 in the case of Basudeb Karmakar Vs. The Superintendent of CGST and CX, Range VIII, BBD Bag II Division, Kolkata North Commissionerate and Ors, which acknowledged that cancellation of GST registration carries serious civil consequences and warrants a liberal and pragmatic judicial approach.

Submissions on Behalf of the CGST Authorities

The learned counsel for the CGST authorities raised several objections: