Gauhati High Court permits GST cancellation revocation and instalment payment of dues under Section 80

Background of the dispute

The matter in N Chetia And Sons Trading And 2 Ors Vs State of Assam And 3 Ors came before the Gauhati High Court as a writ petition under Article 226 of the Constitution of India. The petition was filed by a partnership firm, “M/s N Chetia & Sons Trading”, and its two partners, challenging several coercive and consequential actions taken by the Assam State GST authorities.

The assessee-firm, engaged in contract and supply activities for various departments including the MES department GARRISON ENGINEER DINJAN, held GST registration under the Assam Goods and Services Tax Act, 2017 with Registration No. 18AAHFN2023R2ZW. The firm’s registered office is at Gobindapur, Panitola, Tinsukia, Assam, PIN: 786183.

Due to continued non-filing of monthly returns and resultant non-payment of GST, the State tax authorities initiated proceedings that culminated in cancellation of the firm’s GST registration in 2021, and subsequent recovery actions for multiple financial years.

Reliefs sought before the High Court

The petitioners approached the Gauhati High Court seeking, broadly, to undo the consequences of their past defaults and to restore their ability to comply prospectively. The specific prayers included:

  • Quashing the Show-Cause Notice for Cancellation of Registration dated 23.08.2021 (Reference Number: ZA1808210297964) issued by the Deputy Commissioner of State Tax, Tinsukia Zone, Assam.
  • Setting aside the Order for Cancellation of Registration dated 15.09.2021 (Reference Number: ZA180921017315O) passed by the same authority.
  • Quashing the Show-Cause Notice dated 29.11.2024 issued under Section 74 of the Assam Goods & Services Tax Act, 2017 for FY 2020-2021, along with all follow-up actions.
  • Quashing the Summary of Show-Cause Notice in Form GST DRC-01 dated 29.11.2024 issued under Section 73 for FY 2020-2021 and all actions taken pursuant thereto.
  • Setting aside the Demand Notice dated 20.02.2025 issued under Section 74 for FY 2020-2021 and related recovery steps.
  • Quashing the Order dated 20.02.2025 passed under Section 73 for FY 2020-2021 together with the summary in Form GST DRC-07 and consequential actions.
  • Setting aside the Show-Cause Notices issued under Section 74 of the Assam Goods & Services Tax Act, 2017 for FYs 2018-2019, 2019-2020, 2020-2021, 2021-2022, 2022-2023 and 2023-2024 including all follow-up measures.
  • Directions to defreeze the bank accounts of the petitioners and quashing Letter No. 1873 dated 04.04.2025 issued by the Assistant Commissioner of State Tax, Tinsukia Unit, to the Garrison Engineer, Dinjan MES, by which the department was asked not to allot work to the firm.

Petitioners’ factual narrative and difficulties

The petitioners narrated that:

  • The firm’s GST registration was cancelled after a show-cause notice dated 23.08.2021 because monthly returns were not filed and GST liabilities remained unpaid.
  • Post-cancellation, the department initiated recovery proceedings to realise GST dues from the firm for several financial years.
  • As part of recovery, the authorities:
    • Attached the bank accounts of the firm and its partners.
    • Communicated with departments like Dinjan Garrison MES directing them not to award further work to the firm.

The petitioners further explained:

  1. Technical and communication constraints

    • The managing partner (petitioner No. 2) was not technologically adept.
    • According to the petitioners, show-cause notices were not served in physical form; they were only uploaded on the GST portal.
    • There was a breakdown in communication between the firm and its tax advisor, due to which returns were not filed in time and GST dues remained unpaid.

  2. Portal-driven restriction post-cancellation

    In an additional affidavit, the petitioners clarified that: