2023 (12) TMI 1098 - HC - GST

Cancellation of GST registration of petitioner - SCN did not specify the reasons for proposing to cancel the petitioner s GST registration - whether the petitioner was carrying on its business from the declared principal place of business? There is a controversy whether the petitioner had informed the visiting team as to his then current address. Whereas, the petitioner claims that he has informed the visiting team regarding his new address, the same is disputed by the respondents as there is nothing on record to substantiate the same. HELD THAT - It is apparent that no physical verification had been carried of the petitioner s earlier premises during the period 14.10.2022 to 31.05.2023. Any such verification was required to be carried in accordance with the Rules, which also mandates the petitioner to be issued a notice for the same. It cannot be accepted that the Appellate Authority could have taken a definite view of the petitioner being non- functional from its declared place of business prior to 31.05.2023. It is also apparent that there is no contest that the petitioner had furnished evidence of his leasing another premises with effect from 31.05.2023. Undisputedly, the petitioner has not been unable to upload his application for change of its earlier place of business as the petitioner s GST registration stood suspended with effect from 25.01.2023. The concerned official of the respondents shall visit the petitioner s current premises (336/26, Onkar Nagar-B, Tri Nagar, Delhi-110035), within a period of one week from date, to verify whether the petitioner is occupying the same - In the event the petitioner is found occupying and operating from the aforesaid premises, the petitioner s GST registration shall be restored immediately thereafter - The petitioner shall file the requisite application regarding shifting to his new place of business. The concerned official shall verify whether the petitioner has filed the requisite returns as well as application for updating its current place of business on the record. Petition disposed off.

Summary

Issues involved:
The issues involved in the judgment are the cancellation of GST registration, non-compliance with rules, shifting of principal place of business, non-disposal of appeal by the Appellate Authority, and the validity of Rule 23(3) of the CGST Rules.

Cancellation of GST Registration:
The petitioner challenged the cancellation of its GST registration, which was initially proposed due to the petitioner being deemed non-existing at the principal place of business. The High Court found that the reasons for cancellation were not adequately specified in the Show Cause Notice, leading to the order being set aside and remanded for fresh consideration. The petitioner provided necessary documents and claimed to have shifted the business premises, leading to a subsequent cancellation order based on the alleged non-operation from the declared principal place of business.

Non-Compliance with Rules:
The petitioner argued that the Appellate Authority rejected the appeal based on a perceived gap between the expiry of the previous Rent Agreement and the commencement of the new one. The petitioner contended that there was a continuous occupation of the earlier premises until the shift to the new place of business. The High Court noted the lack of physical verification during the alleged gap period, as mandated by the Rules, and directed verification of the current premises to determine the occupation status.

Shifting of Principal Place of Business:
The petitioner claimed to have shifted the principal place of business, providing Rent Agreements for both the old and new premises. The Appellate Authority accepted the shift but questioned the continuity of operation from the old premises until the new one became operational. The High Court emphasized the need for physical verification and directed the concerned official to verify the occupation of the current premises within a week.

Non-Disposal of Appeal by Appellate Authority:
The petitioner's appeal against the cancellation of GST registration was rejected by the Appellate Authority, prompting the petitioner to file another writ petition challenging the delay in disposal. The High Court directed the Appellate Authority to expedite the disposal of the appeal within four weeks, leading to the subsequent rejection of the appeal and the filing of the present petition.

Validity of Rule 23(3) of the CGST Rules:
Initially, the petitioner challenged Rule 23(3) of the CGST Rules as arbitrary and violative of constitutional provisions. However, during the proceedings, the petitioner focused on the delay in the disposal of the appeal rather than challenging the rule itself. The High Court disposed of the petition, urging the Appellate Authority to expedite the appeal process without delving into the constitutional validity of the rule.