Madras HC allows restoration of cancelled GST registration subject to strict compliance conditions

Background of the writ petition

The matter before the Madras High Court in Tvl. Premium Tyres Private Limited Vs Assistant Commissioner arose from a challenge to an order dated 21.06.2025 by which the assessee’s GST registration had been cancelled. The assessee approached the Court under writ jurisdiction seeking restoration of the registration to regularize its GST compliance.

During hearing, the Court recorded that the assessee attributed the non-filing of returns to severe financial pressure and adverse business conditions. On account of such constraints, the promoters did not personally monitor GST compliances and, under a bona fide understanding, relied on their appointed accountant to undertake all statutory obligations, including filing of GST returns. It later came to light that the accountant had failed to file returns for a continuous period of six months, culminating in cancellation of the GST registration through the impugned order dated 21.06.2025.

Assessee’s submissions before the Court

The authorised counsel for the assessee put forward the following core submissions:

  • The non-filing of returns was not deliberate or with any intent to evade tax, but occurred due to financial difficulties and misplaced reliance on the accountant.
  • The assessee remained under a bona fide impression that the accountant was regularly filing all required GST returns and handling routine GST affairs.
  • Once the cancellation order was served and the lapse discovered, the assessee expressed willingness to make good all past non-compliances.

Specifically, the assessee undertook before the Court that:

  1. All pending GST returns would be filed for the defaulted periods.
  2. Entire tax dues would be discharged, along with applicable interest and any statutory fee or penalty, in accordance with the Goods and Services Tax law.
  3. The assessee sought revocation of the cancellation order to enable access to the GST portal, which is a pre-condition for filing returns and making electronic payments.

On the strength of this undertaking, the assessee urged that the cancellation of registration may be set aside and the registration restored to enable lawful continuation of business and compliance.

Revenue’s stance before the Court

The learned Additional Government Pleader appearing for the respondent authority confirmed that:

  • The GST registration of the assessee had indeed been cancelled through the impugned order dated 21.06.2025.
  • The cancellation was based on non-filing of GST returns for the prescribed period as observed by the department.

No serious objection was raised to the proposal of restoration, and the Revenue instead left it to the Court to issue appropriate directions, including any conditions that might be considered necessary to safeguard the interests of the department and ensure future compliance.

Court’s consideration of non-compliance

After hearing both sides and examining the record, the Madras High Court considered the explanation offered by the assessee regarding the failure to file returns for six months.