2024 (4) TMI 150 - HC - GST

GST registration was suspended - show cause issued as to why the registration be not cancelled - Validity of order - application seeking cancellation of GST registration was rejected - HELD THAT - Learned counsel for the petitioner submitted that petitioner has shut all business activities. As per the petitioner he on his own found discrepancy in his return and accordingly deposited a sum. Show cause notice dated 10.11.2023 was issued to the petitioner after a gap of 9 months seeking to cancel its registration. Said notification was issued on the ground that Section 29(2)(e)- registration obtained by means of fraud willful misstatement or suppression of facts . The show cause notice required the petitioner to appear before the undersigned i.e. authority issuing the notice. Notice did not give the name or designation the officer or place where the petitioner has to appear. Thereafter vide show cause notice dated 10.11.2023 the registration of the petitioner was suspended w.e.f. 10.11.2023. Thus the order dated 10.11.2023 rejecting application of the petitioner seeking cancellation of its registration is set aside. The GST registration is cancelled with effect from 23.02.2023 i.e. the date when the petitioner first applied for cancellation of its registration. Petitioner shall however comply with Section 29 of the Central Goods and Services Tax Act 2017 and furnish all the details as required by the said provisions. The petition is accordingly disposed of in the above terms.

Summary

Issues involved:
The issues involved in this case are the suspension and subsequent cancellation of GST registration based on allegations of fraud, willful misstatement, or suppression of facts under Section 29(2)(e) of the Central Goods and Services Tax Act, 2017.

Summary:
The petitioner challenged a show cause notice dated 10.11.2023 that suspended their GST registration. The petitioner had earlier applied for cancellation of registration on 23.02.2023 but received a rejection order on 10.11.2023 due to non-appearance for a hearing. Subsequently, a new show cause notice was issued on the same day seeking cancellation based on the same grounds of fraud or misstatement. The petitioner's registration was suspended on 10.11.2023. The petitioner claimed to have ceased business activities and voluntarily disclosed discrepancies in their return by depositing a sum of Rs. 7,50,107. The court set aside the order rejecting the cancellation application and instead cancelled the registration effective from the date of the initial cancellation request. The petitioner was directed to comply with Section 29 of the Act. The respondents were permitted to take further legal actions for tax recovery.

This judgment addressed the issues of procedural fairness in the cancellation of GST registration, the petitioner's voluntary disclosure of discrepancies, and the court's decision to cancel the registration from the date of the initial cancellation application.