Cancellation of GST Registration on the basis of letter received from DC that the firm is non-existent?

This writ petition is filed against the order of cancellation of Petitioner's GST Registration.

The relevant part of the show cause notice issued is extracted below:

“Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:

1. Letter dt. 6.04.2022 received DC, CGST-Delhi South Commissionerate - the firm is non existent.

....

Please note that your registration stands suspended with effect from 12/04/2022.”

As is evident from the extract, the revenue suspended the registration of the petitioner w.e.f. the date of the issuance of the show cause notice.

Petitioner:

The impugned order cannot be sustained in law, for the reason that, now, the revenue appear to have accepted the position that the letter dated 06.04.2022 issued by the DC which was the foundation for the issuance of the show cause notice dated 12.04.2022 and the resultant impugned order, was not furnished to the petitioner.

It has also emerged that no notice of inspection was served on the petitioner.

If the proper officer opted for physical verification of the petitioner’s business premises, it could only be carried out in the presence of its authorized representative. In other words, in such eventuality, a prior notice/intimation would have to be served by the proper officer.

Revenue:

Revenue relies on the photographs appended to the counter-affidavit, to demonstrate that there was no business activity being carried out by the petitioner.

It is, therefore, revenue's contention that even if the communication dated 06.04.2022 was furnished to the petitioner, the result would be the same, and therefore, the grievance articulated on behalf of the petitioner that principles of natural justice were not adhered to cannot help the cause of the petitioner.

Held:

A perusal of the record clearly demonstrates that neither was the letter dated 06.04.2022 furnished to the petitioner, nor was the petitioner given any notice of inspection.

Insofar as the requirement to give notice of inspection is concerned, petitioner bases his submission on Rule 25 of the 2017 Rules. The said rule reads as follows:

“25. Physical verification of business premises in certain cases.- Where the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification.” [Emphasis is ours]

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Cancellation of GST Registration

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