2025 (2) TMI 726 - HC - GST

Cancellation of GST registration of the petitioner - firm was not functional because the petitioner was not present at the office during an inspection - HELD THAT - In Gupta Enterprises 2024 (1) TMI 954 - PUNJAB AND HARYANA HIGH COURT after noticing the provisions of Rule 21(a) and 25 of the CGST Rules 2017 and after considering that the revocation of registration has resulted in financial loss caused to the concerned businessman the Court restored the registration of the concerned petitioner. In the present case it is found that merely on one inspection if the person is not found to be available at his place of office a presumption cannot be drawn that the firm is not functional more so when there have been transactions and the firm has been regularly filing its returns - the action taken by the respondents is in haste and the same is not sustainable in law. The impugned order is set aside - petition allowed.

Summary

The Punjab and Haryana High Court considered a case where the Goods and Services Tax (GST) registration of the petitioner was cancelled by the respondents based on the Inspector's presumption that the firm was not functional because the petitioner was not present at the office during an inspection. The petitioner's revocation application and subsequent appeal were rejected. The petitioner relied on a previous judgment by a Coordinate Bench to argue for restoration of registration.The Court referred to the CGST Rules, 2017, and considered the financial loss caused to the petitioner due to the registration revocation. The Court noted that the cancellation had serious ramifications for the petitioner's business, including the rejection of a refund order. The Court found that the actions of the respondents were hasty and not sustainable in law, especially considering the regular filing of returns by the firm and ongoing transactions.The Court held that a presumption of non-functionality based on one inspection where the petitioner was not present was unjustified. Consequently, the Court allowed the petition, set aside the cancellation order, the rejection of the revocation application, and the order passed in the appeal. The Court restored the petitioner's registration number and directed the petitioner to comply with the law and file returns.In conclusion, the Court allowed the writ petition, granted the restoration of the petitioner's registration, and disposed of all pending applications related to the case.