2022 (9) TMI 890 - HC - GST

Cancellation of registration certificate of petitioner - rejection of revocation application - existence of principal place of business or not - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The entire proceedings, right up to the stage of passing of the order-in-appeal was legally flawed. Accordingly, the impugned order is set aside. Liberty is, however, given to the respondent/revenue, to issue a fresh SCN, if deemed necessary, with regard to the registration certificate, issued under the Act - the registration of the petitioner shall be restored. Given the circumstances in which the petitioner was placed, on account of the actions of the respondent/revenue, no interest or penalty will be levied on account of delay in filing the pending returns - Petition disposed off.

Summary

Issues:
Challenge to cancellation of registration certificate and rejection of revocation application.

Analysis:
The petitioner sought the quashing of the order canceling the registration certificate and the rejection of the revocation application. The impugned order dated 22.02.2022 was challenged in an appeal against the order dated 08.12.2021, where the registration was canceled. The action was based on a show cause notice (SCN) dated 08.07.2021, which lacked specific reasons for cancellation. The petitioner filed a revocation application, leading to a subsequent SCN on 17.11.2021, citing non-existence during an inspection on 05.07.2021. The petitioner replied, explaining the relocation of its business premises, which was not considered in the rejection order dated 08.12.2021. The appellate authority upheld the cancellation, citing failure to show sufficient cause, despite the petitioner's relocation explanation.

In the subsequent proceedings, the court noted discrepancies in the proceedings. The initial SCN lacked clarity on the alleged infraction, and the inspection on 05.07.2021 was not mentioned in the first SCN. Additionally, a subsequent SCN on 17.11.2021 was issued, not in line with the CGST Act, 2017. The impugned order lacked reasoning on the petitioner's relocation information. Due to these legal flaws, the court set aside the impugned order and restored the petitioner's registration. The respondent was given liberty to issue a fresh SCN if necessary.

Furthermore, the petitioner was granted four weeks to file pending returns, considering the registration cancellation's impact. No interest or penalty would be levied for the delay in filing returns. The respondent was directed to activate the designated portal for the petitioner within forty-eight hours of the judgment. This relief was granted for a limited period of four weeks from the date of receipt of the judgment. The writ petition was disposed of accordingly, with pending applications closed, and parties instructed to act based on the digitally signed copy of the order.