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2024 (6) TMI 832 - HC - GSTCancellation of GST registration of petitioner - business premises was found non-functional at the time of field inspection - failure to file reply to the notice within the time specified therein - HELD THAT - The proper officer was required to get the physical verification of the business premises done in the presence of concerned person. In the present case, it seems the respondents have clearly violated the provisions of Rule 25 of CGST Rules because the Appellate Authority, State Taxes (Appeals-II), Kashmir-Srinagar in its order, bearing No.234-37/GST/DCST/APP-II dated 18.08.2023, impugned herein, has clearly recorded that the State Taxes Officer (STO) had fairly conceded before him that no notice was issued to the petitioner-company herein as mandated by Rule 25, requiring presence of its employee(s) at the time of verification. Further, nowhere in the CGST provisions it has been stipulated that the employee(s) must be present at the business premises all the time. Therefore, on this ground alone the impugned orders are liable to be quashed and set aside. Once the State Tax Officer had himself admitted before the Appellate Authority, State Taxes (Appeals-II), Kashmir Division that the unit of the petitioner-company was existing and he confirmed existence of the same, as reflected in order dated 29.08.2022, then what prompted the respondents herein, particularly State Tax Officer, to again issue show cause notice dated 20.09.2022 within 19 days of the restoration of petitioner s registration or within 22 days of the passing of order dated 29.08.2022, proposing to cancel the registration of petitioner-company being non-functional at the principal place of business, is not forthcoming. It is strange enough that just 22 days earlier in the order dated 29.08.2022 passed by the Appellate Authority, State Taxes (Appeals-II), Kashmir Division, the State Tax Officer had himself admitted that the unit of petitioner-company was existing at the principal place of business and he confirmed the existence of the same as per his inspections. Further, the file reveals that the petitioner-company had intimated to respondents Nos.2 and 3 regarding change of principal place of business to Boulevard Shopping Complex, Ghat No.03/04, Boulevard Road, Srinagar with effect from 07.05.2023 along with relevant documents and the same has also been acknowledged by them. Respondents, particularly respondent No.3, are directed to restore the GST registration of petitioner-company forthwith retrospectively, i.e., with effect from 20.09.2022 and to allow the petitioner-company to file the annual returns for the financial years 2021-22 and 2022-23 onwards with late fees/interest, if any, as admissible under Rules - Petition disposed off.
Issues Involved:
1. Cancellation of GST registration. 2. Rejection of application for revocation of cancellation. 3. Rejection of appeal by the appellate authority. 4. Rejection of review application by the appellate authority. 5. Compliance with Rule 25 of the CGST Rules, 2017. 6. Change of principal place of business. Detailed Analysis: 1. Cancellation of GST Registration: The petitioner sought to quash Order No.ZA011122002143S dated 05.11.2022, which canceled their GST registration with effect from 20.09.2022. The cancellation was based on the ground that the business premises were found non-functional during a field inspection. 2. Rejection of Application for Revocation of Cancellation: The petitioner's application for revocation of the cancellation order was rejected by Order No.ZA0112220073297 dated 16.12.2022. The rejection was due to the petitioner's failure to file a reply to the notice within the specified time. 3. Rejection of Appeal by the Appellate Authority: The appellate authority dismissed the petitioner's appeal on 18.08.2023 through Order No.234-37/GST/DCST/APP-II, stating it was devoid of any merit. 4. Rejection of Review Application by the Appellate Authority: The review application filed by the petitioner was rejected on 17.11.2023 via Order No.383-86/GST-17/Appeal-II. 5. Compliance with Rule 25 of the CGST Rules, 2017: The petitioner argued that the respondents did not adhere to Rule 25 of the CGST Rules, 2017, which mandates physical verification of business premises in the presence of the concerned person. The court found that the respondents violated Rule 25 as no prior notice was given to ensure the presence of the petitioner's employees during the verification. 6. Change of Principal Place of Business: The petitioner changed its business address to Boulevard Shopping Complex, Ghat No.03/04, Boulevard Road, Srinagar, effective from 07.05.2023, and communicated this to the respondents with supporting documents. Judgment Summary: The court noted several key points: - The respondents admitted that the petitioner was registered and had filed returns up to September 2022. - The only ground for cancellation was the non-functionality of the business premises during inspections. - The respondents did not follow Rule 25 of the CGST Rules, 2017, as no notice was issued for physical verification in the presence of the petitioner's employees. - The appellate authority had previously confirmed the existence of the petitioner's business premises and ordered the restoration of the GST registration on 29.08.2022. - The issuance of a new show cause notice on 20.09.2022, shortly after the restoration, was found to be unjustified and not supported by any new evidence. - The show cause notice lacked details such as the official who visited the premises and the date of the visit, making it vague and unsigned. Based on these observations, the court quashed and set aside the impugned orders: - Order No.ZA011122002143S dated 05.11.2022 - Order No.ZA0112220073297 dated 16.12.2022 - Order No.234-37/GST/DCST/APP-II dated 18.08.2023 - Order No.383-86/GST-17/Appeal-II dated 17.11.2023 The court directed the respondents to restore the petitioner's GST registration retrospectively from 20.09.2022 and allow the petitioner to file the annual returns for the financial years 2021-22 and 2022-23 onwards with applicable late fees/interest. The petitioner was also instructed to apply afresh for GST registration at the new principal place of business, which should be considered strictly under the rules after fulfilling all terms and conditions.
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