2023 (10) TMI 151 - HC - GST

Cancellation of GST registration of petitioner - Taxpayer is non existent - violation of principles of natural justice - HELD THAT - A physical verification of the principal place of business was conducted on 25.05.2023 and the petitioner was found to be existent - the impugned order cancelling the petitioner s GST registration cannot be sustained as the said order has been passed in violation of the principles of natural justice. The petitioner was not issued any show cause notice proposing to cancel his GST registration number on any other ground other than that he was non-existent at the principal place of business. The Revenue submits that the petitioner has also defaulted in complying with the other provisions of the CGST Act and the rules made thereunder. The petitioner has not filed returns and there is also a substantial demand outstanding against the petitioner - it is not considered apposite to examine any of those issues in this petition. The concerned authorities had issued a demand cum show cause notice dated 10.08.2023 under Section 73 of the CGST Act. The respondents are not precluded from proceeding with the said demand cum show cause notice, however, insofar as the cancellation of the petitioner s GST registration is concerned, the same cannot be sustained. The impugned order is set aside - petition allowed.

Summary

Issues involved: Impugning an order cancelling GST registration based on non-existence and failure to file returns.

Details of the judgment:

1. The petitioner challenged an order cancelling their GST registration, citing non-existence as the reason. The petitioner was asked to respond to a show cause notice within seven days, and their registration was suspended. Subsequent inspection found the petitioner non-existent at the principal place of business. However, the reason for cancellation was later changed to failure to file mandatory GST returns under the CGST Act, which was not mentioned in the original show cause notice.

2. A physical verification later confirmed the existence of the petitioner at the principal place of business. The court held that the cancellation of the GST registration based on non-existence cannot be upheld as it violated the principles of natural justice since the petitioner was not given notice regarding the failure to file returns.

3. The Revenue pointed out other defaults by the petitioner under the CGST Act, such as non-filing of returns and outstanding demands. However, the court deemed it inappropriate to address these issues in the current petition. A demand cum show cause notice was issued separately under Section 73 of the CGST Act for these matters. The court set aside the order cancelling the GST registration and directed the authorities to restore it.

4. The court clarified that while the authorities are not barred from taking further adverse steps against the petitioner in accordance with the law, the cancellation of the GST registration on the grounds stated in the impugned order was not justified and was therefore set aside.