Tribunal Rules GST Registration Cancellation During CIRP Illegal; GST Authorities Must Reinstate Registration and Update Business Address
In a significant ruling on 21st August 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, directed the Goods and Services Tax (GST) authorities to restore the GST registration of Gensol EV Lease Limited, a corporate debtor undergoing Corporate Insolvency Resolution Process (CIRP). The Tribunal emphasized that GST registration cannot be cancelled during the subsistence of CIRP, ensuring uninterrupted statutory compliance and preservation of the corporate debtor as a going concern.
The dispute arose when the GST Department, citing non-filing of returns and alleged non-availability of business at the registered premises, issued a Show Cause Notice and subsequently cancelled the GST registration of Gensol EV Lease Limited retrospectively from 27th October 2023. The cancellation order was passed on 14th December 2025, after the CIRP had commenced on 13th June 2025, following admission of the insolvency petition by the Indian Renewable Energy Development Agency Limited (IREDA).
Mr. Keshav Khaneja, the Resolution Professional (RP) appointed for Gensol EV Lease Limited, challenged the cancellation before the NCLT under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking restoration of the GST registration and updation of the principal place of business to a new address in Gurugram, Haryana.
The GST authorities contended that the cancellation proceedings were initiated based on Anti-Evasion Branch directions and were conducted in accordance with the Central Goods and Services Tax Act, 2017 (CGST Act) and relevant Rules. They further argued that the RP had not followed the prescribed procedure for revocation or fresh registration under Notification No. 11/2020-Central Tax dated 21.03.2020 and related Circulars.
The Tribunal, after detailed examination of the pleadings, submissions, and relevant statutory provisions, underscored the importance of harmoniously construing the IBC and the GST laws. It noted that while CIRP does not ipso facto invalidate statutory proceedings, the GST registration of a corporate debtor undergoing CIRP should not be cancelled under Section 29 of the CGST Act, 2017, as clarified by Circular No. 134/04/2020-GST dated 23.03.2020.
The Tribunal observed that the GST registration directly impacts the ability of the Resolution Professional to comply with statutory obligations and manage the corporate debtor's affairs during CIRP. It held that the issue of GST registration status falls within the jurisdiction of the NCLT under Section 60(5)(c) of the IBC, to the extent it affects the insolvency resolution process.
Importantly, the Tribunal directed the GST authorities to restore the GST registration of Gensol EV Lease Limited and update the new operational address as requested by the RP, subject to verification and compliance with procedural requirements. It clarified that this direction does not preclude the GST authorities from initiating assessment or recovery proceedings under the law but prohibits coercive action during the CIRP.
The Tribunal's order also recommended that a copy of the decision be sent to the Chairman of the Central Board of Indirect Taxes and Customs (CBIC) to guide field officers and prevent undue harassment of Resolution Professionals in CIRP cases.
This ruling reinforces the protections available to corporate debtors under insolvency law and ensures that statutory compliances under GST are not disrupted during insolvency proceedings, facilitating the smooth conduct of CIRP and maximizing the value of the corporate debtor.
Bottom Line:
GST Registration of a Corporate Debtor undergoing CIRP cannot be cancelled during the subsistence of CIRP. The GST authorities are directed to restore the GST registration and process the update of the principal place of business in accordance with applicable laws.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Section 14, Section 60(5)(c); Central Goods and Services Tax Act, 2017 Section 29;
