2024 (7) TMI 805 - HC - GST

Cancellation of GST registration of petitioner - impugned SCN was issued solely on the basis of the communication received from the other department without the Proper Officer being independently satisfied of the same - HELD THAT - This is not a case where an action has been taken by the Proper Officer to cancel the GST registration based on the dictates of any other authority - The petitioner was called upon to furnish a reply within seven working days and was also directed to appear before the Proper Officer on 24.04.2023 at 04.10PM. Concededly, the petitioner did not avail of the opportunity of filing any reply or appearing before the Proper Officer. Consequently, the Proper Officer issued the impugned order on the basis that the petitioner was not existent at the given place of business. The impugned order notes that neither any reply in response to the impugned SCN was filed nor was there any representation on behalf of the petitioner on the appointed date - The petitioner contends that it had a filed reply to the impugned SCN on 27.04.2023. The same is incorrect and is based solely on the reference to a reply dated 27.04.2023 made in the impugned order. The petitioner s case as to why its registration be not cancelled has not been considered on merits. It is considered apposite to set aside the impugned order cancelling the petitioner s GST Registration and permit the petitioner to respond to the impugned SCN. Since the only allegation against the petitioner is that it was found to be non-existent, the petitioner is also at liberty to furnish all documents and material in support of its contention that it continues to be a valid tax entity. Petition disposed off.

Summary

Issues:
Impugning of Goods and Services Tax (GST) Registration cancellation order and Show Cause Notice issuance based on communication from another department without Proper Officer's independent satisfaction.

Analysis:
The petitioner challenged the cancellation of their GST Registration and the issuance of a Show Cause Notice (SCN) in the High Court. The petitioner argued that the SCN was solely based on communication from another department without the Proper Officer's independent satisfaction, which they contended was improper. They cited various court decisions to support their claim. The respondents countered by stating that the SCN was issued due to the return of communication with remarks 'No such firm found,' not on another authority's dictates. The court found merit in this argument, noting that the SCN was issued based on the firm not being found at the given address.

The court highlighted that the petitioner failed to respond to the SCN or appear before the Proper Officer, leading to the cancellation of registration. The petitioner claimed to have replied to the SCN, but the court found this claim erroneous as no reply was filed. The petitioner also did not provide a copy of the alleged reply. Subsequently, the petitioner sought condonation of delay in filing for revocation, which was rejected due to unsatisfactory reasons provided by the petitioner.

The court observed that the petitioner's case was not considered on merits, leading to the respondent offering another opportunity for the petitioner to respond to the SCN. In light of this, the court set aside the cancellation order, allowing the petitioner to respond to the SCN with relevant documents supporting their tax entity validity. The court directed the Proper Officer to consider the response and make an informed decision after hearing the petitioner. It was clarified that the court did not express any opinion on the cancellation of GST registration, preserving the parties' rights and contentions. Ultimately, the petition was disposed of with the directive for the petitioner to file a response to the SCN within four weeks for further consideration by the Proper Officer.