2024 (10) TMI 1389 - HC - GST

Maintainability of petition - availability of alternative remedy - Suspension of GST registration of the petitioner - consent letter/NOC from the land owner had not been produced - It is the submission of the petitioner that the provisions governing the GST registration nowhere requires for providing NOC more than once before the authorities. Maintainability of petition - availability of alternative remedy - HELD THAT - The respondent has issued a show cause notice and at the same time suspended the GST registration which results immediately stopping the business of the petitioner - The Three Judges Bench of the Supreme Court in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS 2024 (4) TMI 466 - SUPREME COURT (LB) while considering the maintainability of the writ petition on the basis of there being statutory alternate remedy has held that the writ petition is maintainable. Suspension of registration - HELD THAT - The petitioner was granted GST registration on 11.07.2017 and amended registration order was also passed on 10.02.2019. Thus from 2019 onwards the petitioner has been operating his business from the principal place of business as well as from additional place of business. It is now only when some dispute has arisen between the landlord and the petitioner in December 2023 after about 4 years the respondent has now issued the impugned letter on 20.05.2024 seeking initiation of cancellation proceedings and order has been passed on 10.07.2024 whereby the suspension of GST registration has been issued on the ground mentioning others - at the stage of amending the registration certificate of registration and for incorporating additional place of business no proof or consent letter or NOC from the property owner is required to be produced. It is only for the purpose of issuing the registration certificate for the principal place of business that the NOC or consent letter from the property owner along with proof of address is required to be produced. Once the same has been done and the registration certificate has been issued merely for adding another place of business there is no requirement under Rule 19 of the GST Rules. Rule 8 of the GST Rules cannot be read contrary to Rule 19 of the GST Rules - the petitioner is not said to have violated the GST provisions and is duly depositing his taxes. The grounds for cancellation cannot be added into the provisions of Section 29 (2) of the GST Act as there is no inclusive clause to Section 29 (2) of the GST Act. There has been a complete non-application of mind while issuing order-cum-show cause notice dated 10.07.2024. The suspension of GST registration has been done for the entire places of business while the NOC demanded was only with respect to the additional place of business. As it is held that even for additional place of business NOC could not have been asked for by the respondents and the same cannot be a ground for suspension/ cancellation of GST registration therefore the order dated 10.07.2024 cannot be allowed to be sustained. The order-cum-show cause notice dated 10.07.2024 passed by the respondents is quashed and set aside. The GST registration is restored. The petitioner shall be allowed to continue operate his business - petition allowed.

Summary

Issues Involved:

1. Legality of the suspension and cancellation of GST registration without providing a No Objection Certificate (NOC) from the property owner for the additional place of business.
2. Availability and applicability of alternative remedies.
3. Compliance with statutory provisions under the GST Act and GST Rules regarding registration amendments and cancellation.

Issue-wise Detailed Analysis:

1. Legality of Suspension and Cancellation of GST Registration:

The primary issue revolves around the suspension and potential cancellation of the petitioner's GST registration due to the absence of a No Objection Certificate (NOC) from the property owner for an additional place of business. The petitioner argued that the GST Act and Rules do not mandate the submission of an NOC for adding an additional place of business. Rule 19 of the Central Goods and Services Tax Rules, 2017, which governs the amendment of GST registration, does not require any specific document for proof of an additional place of business. The petitioner contended that the suspension of GST registration was unjustified and illegal, as it included both the principal and additional places of business without proper reasoning. The court noted that the GST registration was initially granted and later amended to include the additional place of business, and the petitioner had been operating from both places since 2019 without any issues until a dispute arose with the landlord in December 2023. The court found that the respondents' demand for an NOC was not supported by the GST Rules, which only require such documentation for the principal place of business. The court held that the suspension and cancellation proceedings were unjustified, as they were based on an incorrect interpretation of the rules.

2. Availability and Applicability of Alternative Remedies:

The respondents argued that the petitioner had an alternative remedy of filing an appeal before the appellate authority. However, the court found that the immediate suspension of GST registration, which halted the petitioner's business operations, justified the maintainability of the writ petition. The court referred to a Supreme Court judgment, which clarified that a writ petition is maintainable even if an alternative remedy exists, especially when there is no effective remedy available at the stage of suspension. Thus, the court rejected the respondents' contention of an alternative remedy being available.

3. Compliance with Statutory Provisions under the GST Act and GST Rules:

The court examined the statutory provisions under Section 29 of the GST Act and Rule 21A of the GST Rules, which outline the grounds and process for cancellation and suspension of GST registration. The court emphasized that the grounds for cancellation under Section 29(2) are specific and do not include the requirement of an NOC for an additional place of business. The court found that the respondents' actions were not in compliance with the statutory mandate, as there was no provision in the GST Rules requiring an NOC for adding an additional place of business. The court also noted that the petitioner's compliance with GST laws and tax liabilities was not in question, and the suspension order lacked proper application of mind, as it did not differentiate between the principal and additional places of business. The court concluded that the order-cum-show cause notice dated 10.07.2024 was issued without proper justification and was therefore quashed.

Conclusion:

The court allowed the writ petition, quashing the order-cum-show cause notice dated 10.07.2024, and restored the petitioner's GST registration, allowing the petitioner to continue business operations. The court emphasized the need for adherence to statutory provisions and rejected the respondents' actions as unjustified and illegal. All pending applications were disposed of, and no costs were imposed.