2024 (9) TMI 1291 - HC - GST

Challenge to SCN cancelling registration of petitioner - petitioner s principal place of business was found to be non-existent at the time of physical verification - It is the petitioner s case that the impugned SCN has been issued on an ex-facie erroneous conclusion that the petitioner s principal place of business was found to be non-existent. HELD THAT - There are merit in the petitioner s contention that his premises were in existence at the time of physical verification and the respondents conclusion that petitioner s principal place of business was non-existent at the time of physical verification is ex facie erroneous. The respondents conclusion is premised solely on the basis of purported enquiries made from the nearby shop owners . However, the Field Report does not mention the name of the said shop owners or any other details. It is difficult to countenance that a taxpayer s registration can be cancelled solely on the basis of some general queries/enquiries from random persons, of which there is no record. In this case the petitioner s premises are found to be in existence and the sign board outside the premises also bears the petitioner s GSTIN. The Field Report also encloses a photograph of a person in front of the premises of the petitioner - the same establishes that the petitioner was in possession of the premises in question at the material time. The proper officer entertains an apprehension that the petitioner was non-existent at the principal place of business three or four days prior to the date of the physical inspection. It is the petitioner s contention that the shop in question was lying closed and was opened four or five days before the date of the physical inspection as, prior to that, the petitioner s GST registration was suspended. It is considered apposite to direct the petitioner to file a response to the impugned SCN along with all documents relied upon by him so as to establish that his principal place of business is in existence since the date of its registration. The proper officer shall consider the reply of the petitioner and shall take an informed decision thereon - petition disposed off.

Summary

Issues:
Challenge to Show Cause Notice for GST registration cancellation based on alleged non-existence of principal place of business.

Analysis:
The petitioner challenged a Show Cause Notice (SCN) dated 22.12.2023, which called for the cancellation of their GST registration due to the alleged non-existence of their principal place of business. The petitioner contended that the SCN was issued without prior notice or proper verification. The petitioner had previously faced a vague Show Cause Notice dated 07.08.2023, resulting in the cancellation of their registration with retrospective effect from 05.05.2022. However, the cancellation was later revoked by an order dated 30.10.2023. Despite this, a fresh SCN was issued, leading to the current petition. The High Court directed a physical inspection of the petitioner's premises, which took place on 23.01.2024. The Field Report confirmed the existence of the petitioner's premises but noted the absence of the petitioner during the verification. The respondents based their conclusion of non-existence on oral statements from unnamed nearby shop owners. The Court found the conclusion erroneous, emphasizing the lack of concrete evidence to support the claim. The Court directed the petitioner to respond to the SCN with supporting documents and instructed the respondents to restore the petitioner's GST registration immediately. The petitioner was given two weeks to submit their response, and the respondents were required to make a decision within the following two weeks.

This judgment highlights the importance of proper verification and evidence in cases involving the cancellation of GST registration. It underscores the need for concrete documentary proof rather than relying solely on oral statements. The Court's decision to restore the registration emphasizes the significance of due process and the requirement for informed decisions based on substantiated facts. The petitioner's right to be heard and provide supporting evidence was upheld, ensuring fairness in administrative actions related to GST registrations.