The Allahabad High Court directed to issue fresh notice under Section 29(2) of the Uttar Pradesh Goods and Services Tax Act, 2017(UPGST Act) and observed that no cancellation of the GST registration can be made by merely describing the firm as bogus.
The present writ petition has been filed challenging the order passed by the respondent cancelling the GST registration of the petitioner and an order passed by the respondent rejecting the petitioner’s revocation application for cancellation of the registration as well as the order passed by the appellate authority confirming the rejection of the revocation application of the petitioner.
The petitioner, M/S Star Metal Company, was a proprietorship firm. The petitioner claimed to have filed its returns on time and also deposited due taxes. A survey was conducted at the business place of the petitioner and in the said survey, the business place of the firm was not found as disclosed in the registration certificate. Thereafter, the registration of the petitioner was cancelled.
The counsel for the petitioner submitted that the impugned orders have been passed in contravention of the provisions of the GST Act and Rules as opportunity of hearing was not given to the petitioner. The Counsel further submitted that once an order has already been passed in the month of March without providing any opportunity of hearing to the petitioner, the notice issued on 26.04.2021 to show cause as to why rejection of application for revocation of cancellation of registration be not passed, could not be issued.
The Counsel for the petitioner also submitted that the cancellation of registration also suffers from illegality as none of the conditions mentioned in section 29(2) of the UP GST Act are complied with.
The Standing Counsel submits that the orders have been passed in accordance with law and that the petitioner, at the time of inspection, was not found and the firm is treated to be a bogus firm and therefore, the impugned orders have legally been passed.
A Single Bench of the Allahabad High Court comprising Justice Piyush Agarwal relied on the judgment in Apparent Marketing Private Limited observed that “The registration once granted could be cancelled only if one of the five statutory conditions was found present. Per se, no registration may be cancelled by merely describing the firm that had obtained it, was “bogus”.”
The Bench further said that it is left open to the respondent – authority to issue a fresh notice on any specific ground mentioned under section 29(2) of the GST Act, which proceeding, if initiated, may be decided on its own merit without being prejudiced by any observation made in this order.
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