Failure To Furnish Bank Details For GST Registration Is Curable Lapse: Calcutta High Court

The Calcutta High Court has observed that failure to furnish bank details, though a violation of Rule 10A of the Central Goods and Services Tax Rules, can be cured by producing the correct bank details and supporting documents to establish the taxpayer's bona fides.

Justice Smita Das De made the observation while considering a plea against cancellation of GST registration for non-submission of bank details.

The court noted that cancellation of GST registration has severe civil consequences and that the object of GST law is “compliance and not punishment.”

“Such lapse, though a violation of Rule 10A, can be cured by production of correct bank details and supporting documents to establish bonafide,” the court observed.

It added that the ends of justice would be served if the petitioner was given one opportunity to satisfy the authorities about his bona fides.

The case concerned Joydeb Karmakar, whose GST registration was cancelled on June 16, 2025 for non-submission of bank details. The authorities had also sought clarification regarding multiple GST registrations taken under a single bank account.

Karmakar explained that the bank account originally furnished to the GST authorities was jointly held with his elder brother. The brothers later separated and opened individual accounts, but the change was not communicated to the authorities.

The authorities had issued a letter seeking clarification about the multiple GST registrations, but Karmakar did not respond. A show-cause notice was then issued under Rule 21(d), alleging violation of Rule 10A for not disclosing the bank details.

The authorities also opposed the plea on the ground that Karmakar had not appealed against the cancellation order. They argued that he had failed to explain the delay in approaching the high court and had not taken steps to seek revocation of the cancellation.

The court nevertheless noted that there was no case by the authorities that Karmakar was involved in any fraudulent transaction, creation of fake invoices, circular trading or any dubious means of evading tax.

The allegation was confined to non-disclosure of bank details and multiple registrations on a single joint bank account. Karmakar attributed this to his separation from his brother and failure to update the records.

The court also observed that cancellation of GST registration has severe civil consequences as it completely disables a dealer from carrying on business.

“It is a well proposition that object of GST Law is compliance and not punishment,” the court observed

It added 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.

The court directed Karmakar to file a detailed representation within seven days, explaining his bona fides and enclosing the relevant bank details and documents to address the allegation concerning multiple GST registrations on a single bank account.

The authority must give him a personal hearing and pass a reasoned and speaking order on restoration of the registration. The authority was also directed to take an independent decision on the issue.

If, during the hearing, Karmakar is able to satisfy and substantiate his bona fides by producing the relevant documents, including the bank details, the authority has been directed to restore his registration. This is subject to his furnishing returns for the entire period of default and paying the outstanding taxes, applicable interest, late fees, fines, and penalties.

The authority must also 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 court accordingly quashed and set aside the June 16, 2025 cancellation order, subject to compliance with its directions. It made clear that Karmakar would not get the benefit of the order if he failed to comply.

The writ petition was disposed of without the court going into the merits of the case.

For the Petitioner: Himangshu Kumar Ray, Saptak Sanyal, Sushant Bagaria, Subhasis Podder and Shiwani Shaw.

For the CGST Authority: Uday Sankar Bhattacharya, Kaustav Kanti Maity and Banani Bhattacharya.For the Union of India: Anjan Chakraborty