In a decisive ruling on July 21, 2025, the Patna High Court in M/s Maharaj Ji Enterprises vs. Union of India reaffirmed that prior GST registration cancellation does not automatically bar an applicant from obtaining fresh GST registration. The Court clarified that any rejection of a new application must be based on current non-compliance under Section 29(2)(b)/(c) and backed by a reasoned and speaking order, following due process. Arbitrary denials solely citing prior cancellation were struck down.
This judgment underscores the legal alignment with CBIC Circular No. 95/14/2019‑GST, emphasizing that cancellation in itself does not permanently disable the right to re-register, as long as statutory conditions are properly evaluated and documented.
📄 Case: M/s Maharaj Ji Enterprises vs. Union of India
- Civil Writ Jurisdiction Case No. 15175 of 2024, decided on 16 July 2025 by the Patna High Court.
What the Court held:
- A new GST registration application cannot be outright rejected simply on the basis of a previous cancellation, in line with CBIC Circular No. 95/14/2019‑GST dated 28 March 2019.
- However, the Proper Officer must:
- Examine if the applicant still falls under Section 29(2)(b)/(c) (e.g., unresolved tax liabilities or return non‑filing).
- Explicitly record findings on this.
- Issue a reasoned and speaking order explaining any rejection.
- In this instance, the rejection was declared unreasoned and arbitrary. The Court quashed it and sent back the matter to the department for a fresh hearing, after complying with procedural and statutory requirements.
🔑 Legal Significance & Takeaways
- This ruling reinforces CBIC Circular No. 95/14/2019‑GST, which permits fresh registration even after prior cancellation, so long as the statutory conditions of Section 29(2) are properly considered and reasons are documented.
- It aligns with CBIC guidance and confirms that unless the earlier reasons for cancellation still apply, fresh registration cannot be denied automatically—a reasoned evaluation is essential.
🧾 Background Context
- The CBIC Circular No. 95/14/2019‑GST clarified that cancellation of a GST registration does not permanently bar a taxpayer from filing anew, provided that the officer checks compliance status and records findings on return‑filing or pending dues.
- This Patna HC judgment is consistent with other recent judicial decisions that emphasize adherence to natural justice, reasoned orders, and statutory compliance.
✅ Summary
| Issue | Decision |
|---|---|
| Can a fresh GST application be refused solely because an earlier registration was cancelled? | No. If no continuing non‑compliance under Section 29(2), a fresh application must be considered. |
| What must the Proper Officer do? | Examine Section 29(2)(b)/(c) conditions, record findings, issue a reasoned order, and provide hearing opportunity. |
| Outcome in this case | Rejection struck down; fresh registration application must be reconsidered fairly. |
This order builds on CBIC Circular No. 95/14/2019‑GST (28 March 2019) and ensures that taxpayers—even those whose GST registration was previously revoked—have a fair opportunity to re‑apply, provided they comply with statutory norms.
🔹 Section 29(2) – Cancellation by the Proper Officer
The Proper Officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where:
(b)
“A person paying tax under section 10 (i.e., under the Composition Scheme) has not furnished returns for three consecutive tax periods.”
- This means:
If a composition taxpayer fails to file quarterly returns (GSTR‑4) for three straight quarters, their registration may be cancelled.
(c)
“Any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months.”
- This means:
For regular taxpayers (not under composition scheme), if they fail to file monthly or quarterly returns for six consecutive months, the department may initiate cancellation proceedings.
🧾 Summary Table
| Clause | Applies to | Trigger for Cancellation |
|---|---|---|
| 29(2)(b) | Composition taxpayers | Not filing GSTR-4 for 3 quarters |
| 29(2)(c) | Regular taxpayers | Not filing returns for 6 months |
⚠️ Important Notes:
- These are discretionary powers—officers must follow due process, including serving a show cause notice and allowing the taxpayer to respond or comply, before cancelling registration.
- Non-compliance with return filing under these clauses may also impact a person’s eligibility to reapply for new registration, if still continuing at the time of new application.
If you’re looking to re-register after cancellation, ensure:
- All pending returns are filed (even for the cancelled registration), and
-
Any outstanding tax liabilities are cleared.