2025 (3) TMI 168 - HC - GST

Cancellation of GST registration of the petitioner on the ground that the petitioner has not conducted any business in the declared place of business - HELD THAT - In the case on hand admittedly the petitioner has been paying the tax and filing the returns regularly. Since the petitioner s premises was closed at the time of inspection the GST registration of the petitioner was cancelled without ascertaining the fact whether the petitioner is carrying on the business or not. The reason given by the petitioner is that since the proprietor had gone to abroad during deepavali holidays the business was closed for 10 days. The respondent without ascertaining the same has erred in coming to the conclusion that the petitioner was not carrying any business in the declared place. Therefore this Court is of the view that the reason provided by the petitioner appears to be genuine. The respondents shall take suitable steps by instructing GST Network New Delhi to make suitable changes in the architecture of the GST Web portal to allow the petitioner to file the returns and to pay the tax/penalty/fine within a period of one week from the date of receipt of a copy of this order - The petitioner is directed to file returns for the period till date if not filed together with tax dues along with interest thereon and the fee fixed for belated filing of returns within a period of 4 weeks from the date of restoration of GST Registration of the petitioner. Conclusion - The Court s decision to set aside the cancellation order was based on the genuine reasons provided by the petitioner for the temporary closure of business. Petition disposed off.

Summary

The High Court considered a writ petition challenging the cancellation of the petitioner's GST registration due to alleged non-conduct of business at the declared place. The key issues analyzed in the judgment are as follows:1. **Issue**: Whether the cancellation of GST registration was justified based on the petitioner's alleged non-conduct of business at the declared place. - **Analysis**: The petitioner contended that despite regular tax payments and filing of returns, the respondent cancelled the registration without considering the reasons provided. The respondent argued that the cancellation was based on due consideration of the petitioner's response. The Court noted that the petitioner's premises were closed during an inspection due to the proprietor's absence abroad. The Court found the petitioner's explanation genuine and held that the cancellation was unjustified. - **Holdings**: The Court set aside the cancellation order and directed the restoration of the petitioner's GST registration. The Court instructed the respondents to make necessary changes in the GST Web portal for the petitioner to file returns and pay taxes. The petitioner was directed to file pending returns and pay dues within a specified period. Importantly, the Court specified conditions regarding the utilization of Input Tax Credit (ITC) to ensure compliance with tax regulations.2. **Significant Holdings**: - The Court's decision to set aside the cancellation order was based on the genuine reasons provided by the petitioner for the temporary closure of business. - The Court's directive to restore the GST registration and impose conditions on the utilization of ITC aimed at ensuring compliance with tax laws and proper scrutiny of tax credits.Overall, the judgment emphasizes the importance of considering all relevant factors before canceling a taxpayer's registration and outlines specific conditions for reinstating the registration and managing tax obligations.