Upholding the cancellation of GST registration, the Kerala High Court ruled that the enquiry conducted by the competent officer is not trial.
The present Writ Petition has been filed by the petitioner, M/s Steel India seeking quashing of the orders whereby the petitioner’s GST registration in exercising the powers conferred under Section 29(2)(e) read with Rule 21(a) of the CGST/SGST Act, 2017 and Rules made thereunder has been cancelled with effect from Ist July 2017 and the petitioner has been directed to furnish final return in FORM GSTR-10 within a period of three months and also directed to furnish all pending returns.
The petitioner is a partnership firm said to be engaged in the trading of iron and steel items. The petitioner was a registered dealer under the provisions of Kerala Value Added Tax Act, 2003 till 30.6.2017 and, thereafter, under the provisions of CGST/SGST Acts. It was stated that the petitioner had to stop the business activities temporarily with effect from Ist October 2022 for unforeseen reasons. However, he continued to file returns under the GST regime.
Harisankar V Menon, counsel for the petitioner submitted that the impugned orders, issued by the first respondent are illegal, arbitrary and unjustified and liable to be quashed and that the show cause notice issued to the petitioner does not mention a statement given by the owner of the building where the petitioner said to have the office regarding business activities being carried out by the petitioner from the said premises.
The Government Pleader has opposed the Writ Petition and submitted that the provisions of Section 29(2) and Rule 21(a) do not provide for cross-examination of the person whose statement has been taken into consideration regarding business activity of a dealer from the premises given as address in the GST registration. It was for the petitioner to prove that he was carrying out his business activities from the said premises.
A Single Bench of Justice Dinesh Kumar Singh observed that “On the basis of the materials and enquiries made, the State Tax Officer came to the conclusion that no business activity was carried out by the petitioner from the declared place of business. Upon such conclusion, the State Tax Officer would be well within the power to cancel the registration after affording an opportunity of being heard to the dealer.”
Dismissing the writ petition, the Court noted that “The enquiry conducted by the competent officer is not a trial, but it is summary proceedings to find out whether the registered dealer is conducting any business from his declared place of business or not. The petitioner did not file any document for the change of his business place nor he supported his claim that he was running the business from the given address by producing any documentary or oral evidence.”
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