2022 (11) TMI 833 - HC - GST

Cancellation of GST registration of petitioner - dispute over unpartitioned property and of the business concern - HELD THAT - The license of the appellant granted under the Food Safety and Standard Act was valid upto 29th January, 2018, while as the license of the respondent no. 5 was valid till 14th May, 2021. Therefore, admittedly, neither the appellant nor the respondent no. 5 was having a license, during the pendency of the writ petition, to run the business in question. The issue, as such, was yet again open to be considered afresh by the competent authority. As regards the registration of the business unit, the same stands cancelled on 16th April, 2021 insofar as the appellant is concerned, however, the same, as of now, is registered in the name of respondent no. 5. The proper course was to leave the concerned authority free to take a decision as to who, out of the two, fulfils the criteria for holding a license without placing any embargo on its powers in contravention of the relevant provisions of the Act - the appeal is disposed off by providing that the appellant as also the respondent no. 5 shall be at liberty to approach the concerned authority for issuance/renewal of license.

Summary

Issues:
1. Challenge to judgment on License issued under Food Safety and Standard Act, 2006.
2. Cancellation of Goods and Sales Tax registration.
3. Dispute over ownership and operation of Samci Restaurant.

Analysis:
1. The appellant challenged the judgment regarding the License issued under the Food Safety and Standard Act, 2006, for Samci Restaurant. The appellant claimed to be the sole proprietor of the restaurant and objected to the issuance of the license to respondent no. 5. The court noted the dispute over ownership and operation of the restaurant between the parties. The court emphasized that until the dispute is settled, the authority can withhold granting or renewing the license. The parties were advised to resolve the dispute amicably or through court intervention. The court directed that both parties could apply for a license jointly if they meet the legal requirements.

2. The appellant's Goods and Sales Tax registration was canceled, and a new registration was issued to respondent no. 5. The appellant contended that the cancellation was based on a fraudulent application filed by an employee-accountant. The court observed that the cancellation was done based on the appellant's request, and there was no evidence of third-party fraud in the online process. The court directed the concerned authority to consider the appellant's application for revocation of the cancellation order, ensuring a fair decision.

3. The dispute over the ownership and operation of Samci Restaurant led to legal actions and petitions. The court found that neither party had a valid license to operate the restaurant during the legal proceedings. The court set aside certain paragraphs of the judgment that restricted the competent authority's powers to grant a license. Both parties were allowed to approach the authority for license issuance or renewal. The court instructed the authority to decide on individual claims within a month, without being influenced by previous court observations. The operation of Samci Restaurant was prohibited until the rightful party obtained the license.

In conclusion, the court addressed the complex legal issues surrounding the ownership, licensing, and operation of Samci Restaurant, providing a framework for resolving the disputes and ensuring fair consideration by the competent authority.