This Case Compilation pertains to all issues related to GST registration cancellation in favour of assessee, the issues include stock not found at taxpayer’s premises, retrospective cancellation for non-filing of returns, non-existence of business at disclosed location, GST registration obtained on misstatement and suppression of facts, and issuance of invoice without actual supply.
Table of Contents
Stock Not found at Taxpayer’s Premises
Case Title: M/S Shree Ram Glass Bachauli Kuftabad vs State Of U.P.
The department citing the absence of business activities at the registered address, cancelled the petitioner’s registration and contended that the reply to SCN had not been filed.
The court emphasized the significant consequences of registration cancellation, as it deprives citizens of their fundamental right to engage in lawful business activities. Therefore, a presumption does exist as to such registration having been granted upon due verification of necessary facts. If the respondents propose to cancel the registration thus granted, a heavy burden lay on the respondent authority to see that statutory provisions contained under Section 29 (2) of the Act of 2017 are fulfilled and any one of the five conditions are placed to the assesse for cancellation.
In light of the facts of the case, HC held that findings of adjudicating authority and appellate authority is perverse in as much as the petitioner submitted that he had filed his returns. No further examination of the same was undertaken. Merely because at the place of business no stock was found, it was concluded that the petitioner did not conduct any business activity. There is no law which mandates a businessman to always retain stock at the place of business. In order to arrive at such a conclusion the authorities should have undertaken further exercise to indicate that the returns filed by the assessee were fraudulently filed only to claim Input Tax Credit. The authorities have failed to discharge the duties and merely because the place of business did not contain any stock, the registration of the petitioner was cancelled.
Retrospective GST Registration Cancellation for Non-Filing of Returns
Case Title: Ramesh Chander Versus Assistant Commissioner Of Goods And Service Tax
The Delhi High Court has held that merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with a retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
The court allowed the petition. The show cause notice dated 07.04.2022, order of cancellation dated 13.07.2022 and the order in appeal dated 29.12.2023 are accordingly set aside. GST registration of the petitioner is restored, subject to petitioner filing requisite returns upto date.
Case Title: Aryan Timber Store Versus Sales Tax Officer
The Delhi High court has held that merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with a retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
The court held that once the registration stood cancelled, there was no cause for the petitioner to file any returns. Accordingly, the cancellation of the registration on the ground that petitioner has failed to file returns is not sustainable.
Case Title: Mohana Blue Metal Versus The Assistant Commissioner
The Madras High Court has held that the petitioner has been continuing his business operations and due to the ill health of the Managing Partner of the petitioner-Firm, who was incharge of filing the GST returns of the petitioner, the petitioner-Firm was not in a position to file GST Returns and in the light of the judgments relied on by the learned counsel for the petitioner, this court, in the interest of justice, is inclined to allow this Writ Petition.
Non-Existence of Business at Disclosed Location
Case Title: M/s Star Metal Company vs. Additional Commissioner and Ors.
The Allahabad High Court has ruled that the cancellation of a GST registration that has been granted, requires the respondent authority to bear a substantial burden of proof proving the existence of facts that warrant such cancellation. According to Section 29(2) of the Goods and Services Act, a registration can only be cancelled if one of the five specified statutory conditions are met. Merely describing the registered firm as ‘bogus’ does not justify the cancellation of the registration.
Case Title: F.R. Trade Links Vs The State Tax Officer and Ors
The Kerala High Court held that GST Authority to restore the GST registration as the petitioner has produced the receipt of the building tax from the local authority to prove the authenticity of his stand24. According to section 29 (2) of the act, the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where a registered person has contravened such provisions of the act or the rules made there under as may be prescribed or a person paying tax under section 10 has not furnished returns for three consecutive tax periods or any registered person, other than a person specified in clause (b), has not furnished returns for a continuous period of six months or any person who has taken voluntary registration under sub section (3) of section 25 has not commenced business within six months from the date of registration or registration as been obtained by means of fraud, willful misstatement or suppression of facts. Under the act it’s mentioned that the proper officer shall not cancel the registration without giving the person an opportunity of being heard.
GST Registration obtained on Misstatement and Suppression of Facts
Case Title: Radhey Trading Company vs Principal Commissioner of Goods and Services Tax
The Delhi High Court held that one of the consequences for cancelling a tax payer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
Case Title: S A Traders vs The Goods and Service Tax Officer
In the show cause notice it has been mentioned “in case the registration has been obtained by means of fraud, willful misstatement or suppression of facts” and equally in the cancellation order, it has been mentioned “On verification of GSTR 1 vs GSTR 3B returns and sales turnover, it is observed that, within a span of five months, the TRP has made purchase and sale of scrap worth of Rs.9.63 Crores for which he has not submitted clear records.
The Andhra Pradesh High Court has held that set aside the show cause notice and the order cancelling the registration of the assessee on the ground that both, the show cause notice and the order are doubtful enough and have been issued without mentioning the mistake, misdeed or fraud committed by the Assessee.
Issuance of Invoice without actual supply
The Delhi High court has set aside an order cancelling registration without providing details of alleged fake invoices.
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