2024 (2) TMI 287 - HC - GST

Cancellation of registration of petitioner - facts regarding fraud, wilful misstatement or suppression of facts have not been mentioned in SCN - Violation of principles of natural justice - HELD THAT - The authorities have recorded finding that in physical verification, no such unit was found to be functional at the place which was mentioned in the application for registration and therefore, registration has been cancelled as per the provision of section 29(2) of the CGST Act. Thus, the registration was obtained by fraud, wilful misstatement - The petitioner was given an opportunity by issuing show cause notice but he opted not to file any reply to the said notice. There are no case for interference under Article 227 of the Constitution of India especially when both the authorities have recorded concurrent findings that no such unit exists at the place of business. The petitioner has failed to file any document even alongwith the present petition to show that the unit is functional on the same place. Thus, there is no perversity in the findings recorded by the authorities. Hence, no interference is called for. Petition dismissed.

Summary

Issues involved: Challenge to the order of cancellation of registration on grounds of violation of principles of natural justice.

Summary:

Issue 1: Violation of principles of natural justice

The petitioner challenged the order of cancellation of registration, arguing that it was passed in violation of the principles of natural justice. The show cause notice was deemed vague as it only mentioned grounds of "fraud, wilful misstatement or suppression of facts" without specifying details. The petitioner contended that the lack of specific facts regarding these grounds rendered the impugned orders invalid and should be set aside.

Issue 2: Compliance with procedural requirements

In response, the respondent's counsel asserted that a show cause notice was issued to the petitioner in accordance with section 29(2)(e) and Rule 22 of the CGST Rules, 2017. The notice was issued in the prescribed proforma, as per the provisions allowing cancellation of registration in cases of fraud, wilful misstatement, or suppression of facts. The petitioner, however, did not submit a reply to the notice.

Issue 3: Findings and decision

Upon a spot inspection, the proper officer reported that no operational unit was found at the registered business location. A statement from a partner of the firm confirmed the closure of the unit. Based on these findings, the authorities concluded that the registration was obtained through fraud or wilful misstatement, justifying the cancellation under section 29(2) of the CGST Act. Despite being given an opportunity to respond, the petitioner did not provide any evidence to refute these findings.

Conclusion:

The Court found no grounds for interference under Article 227 of the Constitution, as both authorities had concurred that the registered unit was non-operational. The lack of evidence or documentation from the petitioner to demonstrate the unit's functionality further supported the decision to cancel the registration. Consequently, the petition was dismissed, upholding the cancellation of registration based on the established findings and lack of rebuttal by the petitioner.