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Rules Failure to Furnish Bank Details for GST Registration is
In a significant ruling that underscores the compliance-oriented philosophy of the Goods and Services Tax regime, the has held that a dealer’s failure to furnish bank details for GST registration—though a violation of —constitutes a . The court, presided over by Justice Smita Das De, quashed the cancellation of the GST registration of petitioner Joydeb Karmakar and directed the authorities to restore it subject to the petitioner’s compliance with pending returns and payment of dues.
The case arose from a cancellation order dated , issued by the on the ground that Karmakar had not submitted his bank details as required under Rule 10A. Additionally, the authorities had sought a clarification regarding multiple GST registrations linked to a single bank account. Karmakar, a small trader, explained that he had originally furnished a joint bank account with his elder brother. After the brothers separated and opened individual accounts, the change was not communicated to the .
Background and Procedural History
The authorities initially issued a letter seeking clarification about the multiple registrations under one account, but Karmakar failed to respond. Subsequently, a was issued under , alleging a violation of Rule 10A for non-disclosure of bank details. When no satisfactory explanation was provided, the registration was cancelled. Karmakar then approached the through a , challenging the cancellation.
The opposed the petition, arguing that Karmakar had not availed of the alternative remedy of appeal against the cancellation order and had failed to explain the delay in approaching the court. They also submitted that he had taken no steps to seek revocation of the cancellation.
Court’s Observations: Compliance Over Punishment
Justice Smita Das De noted that the cancellation of GST registration carries severe civil consequences, as it completely disables a dealer from carrying on business. Emphasising the object of the GST law, the court observed: “It is a well proposition that object of GST Law is compliance and not punishment.”
The court acknowledged that the failure to furnish bank details was indeed a violation of Rule 10A, but clarified that such a lapse could be cured by producing the correct bank details and supporting documents to establish the taxpayer’s . The judgment further noted that there was no allegation of fraudulent transactions, creation of fake invoices, circular trading, or any other dubious means of tax evasion. The entire case rested solely on the non-disclosure of bank details and multiple registrations linked to a single joint bank account—an omission that Karmakar attributed to his separation from his brother and the ensuing failure to update records.
A Liberal and Pragmatic Approach
The court recognised that where an assessee expresses a bona fide willingness to file returns and pay outstanding dues with interest and penalty, a liberal and pragmatic approach is warranted. It directed Karmakar to file a detailed representation within seven days, explaining his and enclosing the relevant bank details and documents to address the allegation concerning multiple GST registrations on a single bank account.
The authority was directed to grant the petitioner a personal hearing and pass a on the restoration of the registration. Critically, the court ordered that the authority must take an independent decision on the issue, free from the earlier cancellation order. If during the hearing Karmakar is able to satisfy and substantiate his by producing the relevant documents, including the updated bank details, the authority has been directed to restore his registration. This restoration is subject to Karmakar furnishing returns for the entire period of default and paying all outstanding taxes, applicable interest, late fees, fines, and penalties.
Relief Beyond Restoration: Activation of GST Portal
In a practical step to facilitate compliance, the court also directed the authorities to activate Karmakar’s GST portal and login credentials within a week of the final decision, so that he can file the pending returns and make the required payments. The cancellation order dated , was quashed and set aside, subject to compliance with the court’s directions. The court made it clear that Karmakar would not get the benefit of the order if he failed to comply.
The was disposed of without the court entering into the merits of the case, leaving the factual determination to the GST authority.
Legal Implications for Practitioners and Taxpayers
This judgment reinforces several important principles under the GST framework. First, it confirms that technical lapses such as failure to furnish bank details are not per se fatal to a taxpayer’s registration, provided the taxpayer demonstrates and a willingness to comply. Second, it reiterates that the cancellation of registration is a drastic measure meant to check fraud and evasion, not to punish inadvertent omissions. Third, the ruling encourages authorities to adopt a pragmatic approach when dealing with procedural violations, especially where no or revenue loss is alleged.
For legal professionals advising GST clients, the case serves as a reminder that prompt action to update bank details and respond to show-cause notices is essential. It also provides a strong argument for restoration in cases where the taxpayer can show that the lapse was unintentional and that all outstanding dues will be paid.
Conclusion
The ’s decision in is a welcome clarification on the scope of Rule 10A and the grounds for cancellation of GST registration. By holding that the failure to furnish bank details is a , the court has balanced the need for compliance with the and . Taxpayers and authorities alike will benefit from this liberal yet conditional approach, which prioritises revenue collection over punitive withdrawal of registration. The case now returns to the GST authority for a fresh hearing, where Karmakar will have the opportunity to submit the correct details and secure the restoration of his registration.
