[Cites 14, Cited by 0]
Bombay High Court
Kishore Nichani vs Union Of India on 27 January, 2026
Author: G.S.Kulkarni
Bench: G. S. Kulkarni
2026:BHC-OS:2596-DB 7.WP.4211.2025.DOC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.4211 OF 2025
Kishore Nichani, Age 60 years,
OccBusiness, R/o.21A, Nichani Kutir,
Juhu Tara Road, Juhu,
Mumbai-400 049. Petitioner
versus
1. The Union of India through
Secretary, Ministry of Finance,
Department of Revenue, North Block,
New Delhi.
2. The State of Maharashtra through
Secretary, Ministry of Finance,
Department of Revenue, Mumbai.
3. The State Tax Officer,
MUM-VAT-C-923, Cabin no.328,
3rd floor, GST Bhavan, MTNL Building,
Love Lane, Magzaon, Mumbai-400 010. Respondents
_______
Mr.Bharat Raichandani (through V.C) with Mr.Aditya Shinde for Petitioner.
Mr.Amar Mishra, AGP, for Respondent State.
_______
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 27th January 2026
ORAL JUDGMENT - (Per : G.S.Kulkarni, J.) :-
1. Rule. Respondents waive service. By consent of the parties heard
finally.
2. In this petition filed under Article 226 of the Constitution, the
Petitioner is aggrieved by the actions of Respondent no.3 in not restoring
MANISH
Petitioner's Goods and Service Tax (GST) registration, which came to be cancelled
SURESHRAO THATTE
THATTE Date: 2026.01.30
10:17:40 +0530
on the ground of Petitioner's failure to file returns for a period of more than six
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7.WP.4211.2025.DOC
months. The Petitioner hence seeks a writ to be issued to the Respondents to
restore the Petitioner's GST registration. The substantive prayers as made in the
petition read thus :
"(b) that this Hon'ble Court be pleased to issue a writ of Mandamus or a
writ in the nature of Mandamus or any other writ, order or direction under
Article 226 of the Constitution of India, calling for the records pertaining to
the cancellation of the Petitioner's registration and after going into the
validity and legality thereof be pleased to direct the Respondents to restore
the GST registration of the Petitioner forthwith, with all consequential
benefits, including but not limited to enabling the Petitioner to file pending
returns and make payment of tax, interest and late fees, if any, in accordance
with law;
(c) that this Hon'ble Court be pleased to issue a writ of Mandamus or a
writ in the nature of Mandamus or any other writ, order or direction under
Article 226 of the Constitution of India, calling for the records pertaining to
the cancellation of the Petitioner's registration and after going into the
validity and legality thereof be pleased to direct the Respondents to allow
the Petitioner to file pending returns as may be necessary for the
regularization of compliance;
(d) that this Hon'ble Court be pleased to issue a writ of Mandamus or any
other writ, order or direction directing the Respondents to treat the
Petitioner's representation dated 04.08.2025 (Exhibit- ) as an application
for revocation of cancellation under Section 30 of the CGST Act, 2017 and
Rule 23 of the CGST Rules, 2017 and further direct the Respondents to
forthwith restore the Petitioner's GST registration (GSTIN
27AABPN8898C1ZB) with effect from the date of its cancellation and
allow the Petitioner to file all pending GST returns upon payment of
applicable late fees, if any."
3. It is the case of the Petitioner that he entered into a business conducting
arrangement with M/s.Silver Beach Entertainment & Hospitality Private Limited
for the purpose of 'Running a restaurant and a Bar' from his premises. Under the
said agreement, the day to day business operations remained with the conducting
company and the Petitioner remained the owner of the property. On 19 th July
2018, the Petitioner was duly granted registration under the Central Good and
Service Act, 2017 (`CGST Act'). Further, the Petitioner also filed his returns for
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7.WP.4211.2025.DOC
the month of July-2017. The Petitioner has contended that however, he was
subsequently unable to manage GST compliance due to severe illness and bed rest
from July-2017 to December-2018.
4. On such backdrop, on 30th November 2018, the Respondent no.3
issued a show cause notice to the Petitioner proposing cancellation of registration
retrospectively from 1st July 2017 on the ground of failure to file returns for more
than six months. Consequently, an order dated 15 th December 2018 came to be
passed in form GST REG-19, whereby the GST registration of the Petitioner was
cancelled with effect from 1st July 2017. The Petitioner has contended that
thereafter the Petitioner took steps and made payment of taxes. Thereafter, the
Petitioner filed an application dated 16th January 2020 seeking revocation of
cancellation of GST registration. Such application of the Petitioner dated 16 th
January 2020 was granted by Respondent no.3 on being satisfied with the reasons
provided in the revocation application and a revocation order was passed on 12 th
February 2020. Accordingly the cancellation of GST registration of the Petitioner
stood revoked.
5. About nine months thereafter, i.e. on 11 th November 2020, the
Petitioner was issued a show cause notice seeking explanation as to why the GST
registration should not be cancelled. It is the Petitioner's contention that under the
proviso to Section 29 of the CGST Act, the GST authority shall not cancel the
registration without giving an opportunity of being heard. However, it is the
Petitioner's case that in breach of the said proviso, an order dated 21 st December
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2020 came to be passed whereby the Petitioner's registration came to be cancelled
retrospectively with effect from 31st July 2017.
6. The Petitioner contends that the Respondent no.3 thereafter issued an
order dated 10th February 2022 demanding interest under Section 50(1) of the
CGST Act for the financial year 2017-18. Further, on 25 th October 2024, the
Central Anti-Evasion Wing conducted a search at the Petitioner's premises and
statements were recorded on the same day and on 28 th October 2024. On 14th
January 2025, the Respondent no.3 issued an intimation in the form DRC-01A
under Section 74(5) of the CGST Act ascertaining the tax liability of the Petitioner.
On 6th February 2025, the Petitioner in response to the said notice submitted a
detailed reply enclosing evidence of voluntary payment of the entire GST liability
along with interest and penalty. On such backdrop, another notice was issued by
Respondent no.3 to the Petitioner dated 11 th February 2025 whereby the Petitioner
was called upon to pay additional tax liability in respect of the month of February-
2022. The Petitioner co-operated with the GST authorities and without contesting
the liability, made the payment under a challan. The details of the challan are set
out in the petition and a copy of the challan is also annexed to the petition.
7. The Petitioner has contended that since the entire tax dues were paid,
an order in Form DRC-23, dated 13 th February 2025 came to be passed by
Respondent no.3 restoring the provisionally attached properties and confirming
that all pending government dues stand cleared. The Petitioner hence was under a
bona fide belief that after discharge of the entire tax liability, the GST registration
of the Petitioner would be restored. The Petitioner then made a formal application
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on 4th August 2025 to the State Jurisdictional Authority, inter alia, stating that
since all the tax liabilities stand cleared, the GST registration of the Petitioner be
restored. However, no action was taken on such application and for such reason
the Petitioner has approached this Court by the present proceedings.
8. Mr.Raichandani, learned counsel for the Petitioner has drawn our
attention to Sections 29 and 30 of the CGST Act, as also the corresponding
provisions of the CGST Rules being Rule 23 of the CGST Rules, as also the
communication dated 21st December 2020 issued by the State Tax Officer. It is
Mr.Raichandani's submission that it would be the statutory obligation on the part
of GST authorities to restore the Petitioner's registration in the facts and
circumstances of the case. It is submitted that from the reading of Section 30, upon
clearance of the entire tax dues, the cancellation of the GST registration is
revocable and if the registration is not revoked, it would obviously affect the
interest of Revenue apart from prejudice being caused to the Petitioner, as his
business is virtually stopped. In support of his contention, Mr.Raichandani has
placed reliance on several decisions wherein, in similar circumstances, the Court
passed orders and restored the cancelled GST registration.
9. On behalf of Respondent no.3, the contesting Respondent, it is fairly
submitted that the Petitioner having cleared the tax dues, there would not be any
impediment in allowing the petition.
10. We have heard learned counsel for the parties. With their assistance, we
have perused the record. At the outset, we may observe that the issue in regard to
cancellation of registration of GST is governed by Chapter-VI of the CGST Act,
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2017 and similar provisions under the Maharashtra Goods and Services Tax Act,
2017. Section 25 provides for procedure for registration. The relevant provisions
in the present facts and circumstances are Section 29, which provides for
cancellation or suspension of registration, Section 30 which provides for
revocation of cancellation of registration and Rule 23 of the CGST Rules, 2017.
These provisions are required to be noted which read thus :
"Section 29. Cancellation or suspension of registration -
(1) The proper officer may, either on his own motion or on an application
filed by the registered person or by his legal heirs, in case of death of such
person, cancel the registration, in such manner and within such period as
may be prescribed, having regard to the circumstances where,-
(a) the business has been discontinued, transferred fully for any
reason including death of the proprietor, amalgamated with other legal
entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person is no longer liable to be registered under
section 22 or section 24 or intends to pt out of the registration voluntarily
made under sub-section (3) of Section 25.
Provided that during pendency of the proceedings relating to
cancellation of registration filed by the registered person, the registration
may be suspended for such period and in such manner as maybe prescribed.
(2) The proper officer may cancel the registration of a person from such
date, including any retrospective date, as he may deem fit, where,-
(a) a registered person has contravened such provisions of the
Act or the rules made thereunder as may be prescribed; or
(b) a person paying tax under section 10 has not furnished the
return for a financial year beyond three months from the due date of
furnishing the said return; or
(c) any registered person, other than a person specified in clause
(b), has not furnished returns for such continuous tax period as may be
prescribed; or
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(d) any person who has taken voluntary registration under sub-
section (3) of section 25 has not commenced business within six months
from the date of registration; or
(e) registration has been obtained by means of fraud, wilful
misstatement or suppression of facts;
Provided that the proper officer shall not cancel the registration
without giving the person an opportunity of being heard :
Provided further that during pendency of the proceedings relating to
cancellation of registration, the proper officer may suspend the registration
for such period and in such manner as may be prescribed.
(3) The cancellation of registration under this section shall not affect the
liability of the person to pay tax and other dues under this Act or to
discharge any obligation under this Act or the rules made thereunder for
any period prior to the date of cancellation whether or not such tax and
other dues are determined before or after the date of cancellation.
(4) The cancellation of registration under the State Goods and Services
Tax Act or the Union Territory Goods and Services Act Act, as the case may
be, shall be deemed to be a cancellation of registration under this Act.
(5) Every registered person whose registration is cancelled shall pay an
amount, by way of debit in the electronic credit ledger or electronic cash
ledger, equivalent to the credit of input tax in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock or
capital goods or plant and machinery on the day immediately preceding the
date of such cancellation or the output tax payable on such goods,
whichever is higher, calculated in such manner as may be prescribed :
Provided that in case of capital good or plant and machinery, the
taxable person shall pay an amount equal to the input tax credit taken on
the said capital goods or plant and machinery, reduced by such percentage
points as may be prescribed or the tax on the transaction value of such
capital goods or plant and machinery under section 15, whichever is higher.
(6) The amount payable under sub-section (5) shall be calculated in such
manner as may be prescribed.
(emphasis supplied)
Section 30. Revocation of cancellation of registration :
(1) Subject to such conditions as may be prescribed, any registered person,
whose registration is cancelled by the proper officer on his own motion,
may apply to such officer for revocation of cancellation of the registration in
such manner, within such time and subject to such conditions and
restrictions, as maybe prescribed.
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(2) The proper officer may, in such manner and within such period as may
be prescribed, by order, either revoke cancellation of the registration or
reject the application.
Provided that the application for revocation of cancellation of
registration shall not be rejected unless the applicant has been given an
opportunity of being heard :
Provided further that such revocation of cancellation of registration
shall be subject to such conditions and restrictions, as may be prescribed.
(3) The revocation of cancellation of registration under the State Goods
and Services Act or the Union Territory Goods and Services Tax Act, as the
case may be, shall be deemed to be a revocation of cancellation of
registration under this Act."
(emphasis supplied)
Rule 23 - Revocation of cancellation of registration :
(1) A registered person, whose registration is cancelled by the proper
officer on his own motion, may subject to the provisions of rule 10B,
submit an application for revocation of cancellation of registration, in
FORM GST REG-21, to such proper officer, within a period of ninety days
from the date of the service of the order of cancellation of registration, at
the common portal, either directly or through a Facilitation Centre notified
by the Commissioner.
Provided that such period may, on sufficient cause being shown, and
for reasons to be recorded in writing, be extended by the Commissioner or
an officer authorised by him in this behalf, not below the rank of Additional
Commissioner or Joint Commissioner, as the case may be, for a further
period not exceeding one hundred and eighty days.
Provide further that no application for revocation shall be filed,if the
registration has been cancelled for the failure of the registered person to
furnish returns, unless such returns are furnished and any amount due as
tax, in terms of such returns, has been paid along with any amount payable
towards interest, penalty and late fee in respect of the said returns :
Provided also that all returns due for the period from the date of the
order of cancellation of registration till the date of the order of revocation of
cancellation of registration shall be furnished by the said person within a
period of thirty days from the date of order of revocation of cancellation of
registration :
Provided also that where the registration has been cancelled with
retrospective effect, the registered person shall furnish all returns relating to
period from the effective date of cancellation of registration till the date of
order of revocation of cancellation of registration within a period of thirty
days from the date of order of revocation of cancellation of registration.
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(2) (a) Where the proper officer is satisfied, for reasons to be
recorded in writing, that there are sufficient grounds for revocation of
cancellation of registration, he shall revoke the cancellation of registration
by an order in FORM GST REG-22 within a period of thirty days from the
date of the receipt of the application and communicate the same to the
applicant.
(b) The proper officer may, for reasons to be recorded in writing,
under circumstances other than those specific in clause (a), by an order in
FORM GST REG-05, reject the application for revocation of cancellation
of registration and communicate the same to the applicant.
(3) The proper officer shall, before passing the order referred to in clause
(b) of sub-rule (2), issue a notice in FORM GST REG-23 requiring the
applicant to show cause as to why the application submitted for revocation
under sub-rule (1) should not be rejected and the applicant shall furnish the
reply within a period of seven working days from the date of the service of
the notice in FORM GST REG-24.
(4) Upon receipt of the information or clarification in FORM GST REG-
24, the proper officer shall proceed to dispose of the application in the
manner specified in sub-rule (2) within a period of thirty days from the date
of the receipt of such information or clarification from the applicant.
(emphasis supplied)
11. There are two fundamental issues which would arise from the conjoint
reading of the provisions/rules, firstly, on the grounds which are provided under
the provisions of Section 29, it would empower the GST authorities to cancel
registration. The cancellation of registration, however, certainly involves civil
consequences as it would have an adverse effect on the assessee undertaking its
business activities. It is for such reason that the second proviso to Section 29
provides that the officer shall not cancel the registration without giving an
opportunity of being heard. Therefore, any action on the part of the authority not
adhering to the proviso i.e. not affording an opportunity of being heard, would,
per se, be in the teeth of Section 29, hence void ab initio. Further, Section 30
which provides for revocation of cancellation of registration authorizes the
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concerned tax authority to revoke cancellation of registration of an assessee on
fulfilling the requisite conditions which are specified and recognized by such
provision. Also an application for restoration of the registration is required to be
decided, inter alia, after granting an opportunity of being heard to the assessee
whose registration is cancelled. Thus, it is not the case that authorities are
powerless to pass an order of revocation of cancellation of registration. Sufficient
provision in law has been made and such powers are required to be exercised in
appropriate cases and in the manner as provided by law and in the facts and
circumstances of the case would warrant. However, we find that all these issues are
not taken into consideration as in the present case and such matters unwarrantedly
reach the Court. In the facts of the present case, the Revenue has taken a clear
position that there are no tax dues, as all the demands have stood satisfied.
12. The Courts have consistently taken a view that keeping such
registration cancelled and/or not revoking the cancellation of registration, does not
enure to the benefit of the Revenue, apart from the prejudice which would be
caused to the person whose registration has been cancelled. In Azaria Corp LLP Vs.
The Deputy Commissioner of State Tax (MUM-VAT-E-809) and another (supra)
relied on behalf of the Petitioner, in such context, the Court observed thus :
"11. In the decisions relied upon by the Petitioner, the common thread was
that the restoration of the registration would benefit the Petitioner as well as
the Revenue. The Petitioner would be able to undertake its business and
pay GST in terms of the law. A permanent cancellation and that too for
failure to file returns or pay dues, may not be in the interest of either the
Petitioner or the Respondents. In this case, as noted earlier, the Petitioner
has prima facie made amends by paying the entire dues, interest and late
fees.
12. If, in addition to what has been paid by the Petitioner, any further
amount towards penalty, etc. are found to be due, the Respondents can
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always intimate this fact to the Petitioner, and the Petitioner can pay the
additional amount within 15 days from the receipt of such intimation.
However, to permit the registration to remain cancelled permanently does
appear to be disproportionate at least in the facts of the present case.
14. We may also refer to the decision of the Orissa High Court in the case
of Bimal Kishore Sahu Vs. Additional Commissioner, GST (Appeals),
BBSR & anr1, where, reliance was placed on another decision of the
Coordinate Bench of the Orissa High Court in the case of Mohanty
Enterprises Vs. The Commissioner CT & GST Odisha and registration was
restored after condoning the delay in payments of all dues."
13. Also Stanley Aphonsus D'silva Vs. State of Maharashtra 2, was a case
where registration of the assessee was cancelled for non-filing of returns for more
than six months and when the assessee was ready and willing to pay all dues along
with interest on the same, the registration of the assessee was directed to be restored
by the Division Bench of this Court. A similar view was taken by another
coordinate Bench of this Court in Paramatma Steel Centre Vs. State of
Maharashtra3. We may also refer to the decision of the learned Single Judge of the
Madras High Court in the case of TVL. Saguna Cutpiece Center Vs. Appellate
Deputy Commissioner (ST) (GST), Salem4, wherein the Madras High Court was
dealing with a case of cancellation of registration and the application for revocation
on the cancellation. In such context, referring to the relevant circulars and the
notification, the Court held that the purpose of GST registration is only to ensure
that just tax gets collected and not to debar or de-recognise assessees from
returning back into the GST fold. It was held that the GST enactment cannot be
interpreted so as to deny the right to carry on trade and commerce. The Court in
12024-SCC OnLine-2199
2 (2025) 29 Centax 47 (Bom.)
3 (2025) 33 Centax 173 (Bom.)
4 (2022) (61) G.S.T.L. 515 (Mad.)
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the adjudication also referred to the provisions of Rule 23 providing for Revocation
of cancellation of registration and the Circulars issued in that regard by the Central
Board of Indirect Tax and Customs dated 22nd December 2020.
14. In the light of the above discussion, in our clear opinion, the facts of the
present case are not in dispute that there is no outstanding GST liability of the
petitioner, and hence, in these circumstances, the petitioner was entitled to the
benefit of the restoration of the petitioner's GST registration and to that effect the
petitioner's application for revocation of the cancellation of its registration was
required to be allowed. In these circumstances, the petition needs to succeed as
respondent No.3 has clearly not acted in consonance of the provisions of Section
30 read with Rule 23 of the CGST Rules.
15. The writ petition is accordingly allowed in terms of prayer clause (b).
16. Rule is made absolute in the aforesaid terms. No costs.
(AARTI SATHE, J.) (G. S. KULKARNI, J.)
M.S.Thatte
