2023 (1) TMI 381 - HC - GST

Cancellation of registration of the petitioner-Firm - cancellation on the ground that he was not functioning/not existing at the principal place of business - HELD THAT - From perusal of the order passed by first Appellate Authority it transpires that the order, which runs into five pages, actually takes note of the entire ground taken in the memo of appeal by the Assessee and it covers almost four pages. In one paragraph, the appellate authority has recorded its reasoning stating therein that on the date, when the survey was conduced, the Assessee was not running business on the place, which was informed to the Taxing Department when the registration was done. Apart from this fact, no other finding has been recorded by the first Appellate Authority on the ground which have been taken in the appeal. This Court finds that the first Appellate Authority is duty bound to consider all the grounds raised in the appeal. Before adjudicating any matter on merit, the first Appellate Authority should consider each and every ground so taken and record its findings. The order passed by first Appellate Authority on 27.10.2021 is a cryptic order and the cancellation of registration of GST has a ramification effect on the business of the petitioner - The first Appellate Authority once it had taken note about the rent agreement, should have taken into consideration that the place of business of the Assessee has changed and an opportunity should have been given to the Assessee to place all material before it and the authority should have recorded findings before rejecting the appeal confirming the order of cancellation of registration. The matter is remitted back to the Appellate Authority to reconsider the appeal on merits and deal with each and every grounds so taken in the appeal.

Summary

Issues:
Assailing cancellation of registration under GST Act and order by Appellate Authority.

Analysis:
The petitioner, a Firm registered under the Goods and Services Tax Act, challenged the cancellation of its registration and the order by the Appellate Authority. The petitioner had been filing returns regularly from July 2017 to November 2020. A show cause notice was issued on 10.02.2021 alleging non-functioning at the principal place of business. The cancellation order was passed on 06.03.2021, which the petitioner appealed. The first Appellate Authority rejected the appeal citing that during a survey on 10.02.2021, the business was not operational at the registered place, and a subsequent rent agreement indicated a change in the business location without notifying the Department. The Standing Counsel argued that the Assessee should have informed the Department about any change in business location.

The High Court observed that the first Appellate Authority's order was insufficient as it failed to address all grounds raised in the appeal. The Court emphasized that before deciding on the merit of the case, all grounds should be considered, and findings recorded. Notably, the Authority did not adequately address the change in business location and failed to provide the Assessee with an opportunity to present relevant evidence. The Court noted that the cancellation of the GST registration significantly impacts the petitioner's business. Despite the Assessee's consistent filing of GST returns, the Authority should have thoroughly examined the change in business location and allowed the Assessee to present relevant information before confirming the cancellation order.

Consequently, the High Court deemed the first Appellate Authority's order unsustainable and set it aside. The matter was remitted back to the Appellate Authority with instructions to reconsider the appeal on its merits, addressing all grounds raised by the Assessee. The Authority was directed to complete this review within one month from receiving a certified copy of the Court's order. As a result, the writ petition was partly allowed, providing relief to the petitioner in challenging the cancellation of their GST registration.