2022 (4) TMI 1401 - HC - GST

Cancellation of registration of appellant - cancellation of registration on the ground of non-functioning/non-existing at the place of business - HELD THAT - Considering the facts, the authority committed a grave error in rejecting the application for revocation of cancellation of registration. That apart in the ultimate order dated 18.08.2020 which was put to challenge in the writ petition, we find that there is reference to certain details and data which may not be very germane to decide as to whether the appellant is an existing dealer who is functioning. Prima facie we are of the view that the transactions referred to by the respondent in the order dated 18.08.2020 prima facie shows that the appellant is carrying on business within the State of West Bengal. In any event, we are satisfied that the order rejecting the application for revocation of cancellation of registration is in total violation of principles of natural justice and arbitrary. The appeal is disposed off along with the writ application by setting aside the order dated 8.2.2022 by which the application for revocation of cancellation of registration was rejected and the application dated 08.02.2022 is restored to the file of the concerned authority and the appellant shall appear before the authority alongwith all records to prove that they were carrying on business within the State of West Bengal and based on such record after affording an opportunity of personal hearing take a decision on merit and in accordance with law - application disposed off.

Issues:
1. Challenge against cancellation of registration under CGST Act.
2. Non-compliance with court directions regarding filing of affidavit-in-opposition.
3. Rejection of application for revocation of cancellation of registration.
4. Violation of principles of natural justice and arbitrariness in the rejection of the application.
5. Setting aside the order rejecting the application and restoring it for reconsideration by the concerned authority.

Analysis:
1. The appellant challenged the cancellation of their registration under the CGST Act, stating they were engaged in infrastructure projects and had a PAN India presence. The respondent issued a show cause notice for non-functioning at the place of business, leading to cancellation. The High Court found the rejection of the application for revocation to be erroneous, as the appellant appeared to be conducting business in West Bengal. The Court set aside the rejection and directed the appellant to prove their business activities in the state for a fair decision by the authority.

2. The court noted the non-compliance by the respondents in filing the affidavit-in-opposition within the specified time frame. Despite this, the Court proceeded to evaluate the case based on the appellant's submissions and relevant facts. The Court found that the details cited by the respondent were not decisive in determining the appellant's business existence, emphasizing the need for a fair assessment based on merit and legal principles.

3. The rejection of the application for revocation was deemed a violation of natural justice and arbitrary. The Court emphasized the importance of a fair process and directed the concerned authority to reconsider the application, ensuring the decision is unbiased and not influenced by previous orders. The appellant was instructed to provide necessary records to support their business operations in West Bengal for a just determination.

4. In conclusion, the High Court disposed of the appeal and the writ petition, reinstating the application for revocation for a fresh evaluation. The authority was directed to issue a notice to the appellant, allowing them to present their case and ensuring a decision based on merit and compliance with legal standards. The judgment aimed to rectify the procedural errors and uphold the principles of natural justice in the matter of registration cancellation under the CGST Act.

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