2024 (8) TMI 67 - HC - GST

Cancellation of the petitioner's registration under the Central Goods and Services Tax Act, 2017 - SCN does not disclose reasons as to why the petitioner no. 1 s registration under the said Act is liable to be cancelled - Violation of prinicples of natural justice - HELD THAT - It cannot be said that the petitioner no. 1 was not disclosed the reasons as to why the show cause had been issued. However mere disclosure of reasons, does not satisfy the requirement of the provisions contained in Rule 25 of the Central Goods and Services Tax Rules, 2017. A perusal of the aforesaid Rule would demonstrate the mode and manner in which the physical verification of the business premises in certain cases are required to be carried out. Admittedly, in this case, the petitioners were not notified of the attempt made by the respondents to identify the petitioner no. 1 s place of business. Although, Mr. Banerjee, by placing reliance on the endorsement made by the postal authorities on a letter dated 17th January, 2024 attempts to establish that the petitioner no. 1 is not in existence, such a procedure to establish the existence or non-existence of a company is unknown in law. Although, the procedure adopted by the respondents to cancel the petitioner no. 1 s registration under the said Act may not be strictly as per the procedure laid down, however, the same cannot be said to be per se illegal or without any basis, especially when the petitioners are not interested to have the factual determination as regards the existence of the petitioner no. 1 s business premises made by the respondents, tested out by a further inspection. The above raises a presumption that the petitioners are withholding information and have not approached this Court with clean hands. The petitioners are not entitled to any relief under Article 226 of the Constitution of India - petition dismissed.

Summary

The High Court of Calcutta, with Honorable Justice Raja Basu Chowdhury presiding, issued a judgment in response to a writ petition challenging a show cause notice and subsequent order for cancellation of registration under the Central Goods and Services Tax Act, 2017. The petitioners argued that the show cause notice did not provide sufficient reasons for the cancellation, citing procedural irregularities and lack of specificity. The respondents contended that the notice was justified due to suspicions of the petitioner being a fake entity passing on irregular ITC. The court acknowledged that reasons were disclosed but found shortcomings in the physical verification process and the petitioners' unwillingness to cooperate further. Despite procedural flaws, the court dismissed the petition, questioning the petitioners' bona fides and denying relief under Article 226 of the Constitution of India. The writ petition was ultimately dismissed with no costs awarded.

This judgment highlights the importance of procedural compliance and cooperation in legal proceedings, while also emphasizing the need for transparency and good faith in approaching the court for relief.