Abound IT Serivices Vs State of Gujarat & Ors
Date: November 5, 2025
Subject Matter
GST Registration Cancellation Revoked After Tax Liability Discharged Via Electronic Cash Ledger
Summary
The petitioner's GST registration was canceled w.e.f. February 29, 2024, by an order dated August 31, 2024, following a Show Cause Notice (SCN) dated July 3, 2024. The cancellation was invoked under Section 29(2)(c) of the GST Act due to the petitioner's failure to file GST returns for the prescribed period (March 2024 onwards).
The petitioner submitted an affidavit and evidence from the Electronic Cash Ledger (ECL) showing that although the returns were not filed, the entire tax liability, along with accrued interest and late fees, totaling ₹46,93,112/- (Tax: ₹39.72 lakh, Interest: ₹5.26 lakh, Late Fees: ₹1.35 lakh), had already been computed and deposited into the ECL.
The Revenue (learned AGP), upon instruction, confirmed the deposit in the ECL and agreed to allow the petitioner to file the returns.
Ruling and Directions:
The High Court disposed of the petition by allowing the petitioner to proceed with the filing of returns, which triggers the revocation of the cancellation.
Permission to File Returns: The petitioner is permitted to file the outstanding GST returns (for the period March 2024 to May 2024 onwards). The authorities shall process these returns, taking into account the full amount already deposited in the Electronic Cash Ledger.
Revocation of Cancellation: Upon such compliance (filing of returns using the deposited amount), the order of cancellation of registration dated August 31, 2024, shall stand revoked.
Future Compliance: If the returns reveal any outstanding demand (not covered by the initial deposit), the petitioner shall pay that amount forthwith.
The Court implicitly recognizes the deposit of the self-assessed tax and interest in the ECL as evidence of the taxpayer's intention to comply with the statutory obligation, thereby justifying the restoration of the registration.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. Abhay Y. Desai for the petitioner and learned Assistant Government Pleader Ms. Shrunjal Shah for the respondents.
2. Learned advocate Mr. Desai has filed an affidavit on behalf of the petitioner by placing on record a copy of the Electronic Cash Ledger to demonstrate that though the petitioner has not filed GST Returns for the period from March, 2024 to May, 2024, tax liability has been duly computed by the petitioner based on the available records and transactions, and such liability has already been discharged by way of depositing the same in Electronic Cash Ledger by the petitioner. The said affidavit is ordered to be taken on record.
3. The present petition is filed with the following prayers:
“(A) Your Lordships may be pleased to admit and allow the present Petition;
(B) Your Lordships may be pleased to isssue a Writ of Mandamus or a Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction quashing and setting aside the impugned Order in Appeal dated 02.08.2025 passed by the learned Respondent no.3(Annexure-F), Show cause notice for Cancellation of Registration dated 03.07.2024 issued by the learned Respondent no.2(Annexure-B), as also the order for cancellation of registration dated 31.08.2024 passed by the learned Respondent no.2(Annexure- C) and thereby restore the registration of the petitioner w.e.f 29.02.2024;
(C) Pass any such order and/or further order that may be thought just and proper, in the facts and circumstances of the case.”
4. The basic contention of the petitioner is that the petitioner could not file GST returns for the prescribed period and as such the registration of the petitioner is cancelled by the respondents pursuant to the Show Cause Notice dated 03.07.2024 by order dated 31.08.2024 w.e.f. 29.02.2024 by invoking section 29(2)(c) of the GST Act, as the petitioner has not filed returns thereafter.
5. Learned advocate Mr. Desai has submitted that the petitioner is ready and willing to file GST returns as the petitioner has already deposited the requisite tax along with the interest through Electronic Cash Ledger as stated in the affidavit filed by the petitioner which can be verified by the respondent authorities.
6. Learned AGP Ms. Shah, on the other hand, submitted that if the petitioner is permitted to file the GST returns as required under section 29(2)(c) of the GST Act, the respondent authorities shall process the same and determine the tax liability in accordance with the provisions of the GST Act and after considering the deposit made by the petitioner in the Electronic Cash Ledger, as stated in the affidavit filed.
7. Learned AGP Ms. Shah, under the instructions of Mr. Jay Baldevbhai Desai, STO-1 (I/C), Unit 68, Surat, has submitted that the petitioner has already deposited an amount of Rs.46,93,112/- through various challans in the Electronic Cash Ledger maintained on the GSTN Portal as per Section 49 of the Gujarat SGST Act, 2017 and Rule 87 of the Gujarat SGST Rules, 2017, which inter alia includes the tax dues i.e. of Rs.39,72,494/-, interest of Rs.5,26,632/- and late fees of Rs. 1,35,020/-towards self-assessment tax for the period from March, 2024 to June, 2025.
8. Considering the above submissions, and as there are no other contentions raised on behalf of the petitioner as well as the respondents, this Court is of the opinion that since the petitioner has already deposited the outstanding tax with interest, as if the returns would have been duly filed, in the interest of justice, the petitioner is permitted to file GST returns, as prayed for by the respondent authorities. If such GST return filing is found to be not in accordance with law, the petitioner shall pay forthwith any outstanding amount demand, if any, raised by the respondents. Upon such compliance, the order of cancellation of registration shall stands revoked.
9. With the aforesaid directions, the petition is accordingly disposed of. No order as to costs.