Calcutta HC Rejects GST Revocation Plea Due to the Non-Existence of Business [Read Order]

In a recent judgement, Calcutta High Court upheld the cancellation of Goods and Service Tax (GST) registration of the petitioner because of the non-existence of business.

ED and F Man Commodities India Pvt. Ltd.(Petitioner) was registered under the West Bengal  Goods and Services Act in 2017. Due to losses, it ceased operations in Financial Year (F.Y.) 2018-19 but continued filing nil returns till November 2021.

In November 2021, the petitioner received a show cause notice alleging fraudulent registration without evidence. The petitioner failed to reply and sought additional time citing COVID-19. However, the registration was retrospectively cancelled from July 1, 2017.

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The assessee tried to revoke the registration by filing an appeal and through government amnesty schemes. But all the applications were rejected based on a verification report, which the assessee claimed was never shown.

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The petitioner thereafter approached the High Court seeking relief against the order. The court ordered a fresh physical verification report.

Following this order, the Deputy Commissioner under the Directorate of Commercial Taxes conducted a physical verification on 17.01.2025. The report concluded that ED & F Man Commodities India Pvt. Ltd. never existed or conducted any business at the registered premises.

Somak Basu and Nilanjan Bhattacharya, counsels for the petitioner, argued that the assessee’s representative was present at the premises from 2:00 to 6:00 P.M. on 17.01.2025 as directed, but no officer arrived. The counsels also produced some photographs to substantiate their claims.

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The counsels also added that the cancellation violated natural justice and Section 29(2) read with Rule 22(3) Central Goods and Services Tax Act, 2017 , as no proper notice was served and no hearing was granted.

Meanwhile, the counsel for the department countered that the deputy commissioner conducted the site visit at 2 P.M. on 17 January 2025 and found no trace of the petitioner's business, as there was no signboard. It was reported that the officer met the gatekeeper, who confirmed the non-existence of the petitioner’s business or signage for the past fifteen years.

The counsel also added that the petitioner had been given sufficient opportunity to present its case. But it failed to furnish credible proof.

A.Ray, Md. T.M. Siddiqui, T. Chakraborty, and S. Sanyal represented the respondent.

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After hearing the arguments, Justice Rajarshi Bharadwaj held that the petitioner’s challenge to the retrospective cancellation of GST registration lacks legal validity.

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The court noted that the respondent’s actions were based on definite legal principles. It rejected the petitioner's claim of natural justice violation, stating that the assessee had been given multiple opportunities to be heard but failed to furnish necessary details.

The bench observed that the verification report, submitted per the court’s direction, confirmed that the premises were non-operational. The petitioner’s photographic evidence was aslo termed to be unconvincing.

Thus, the Court upheld the cancellation of registration and dismissed the writ petition.

To Read the full text of the Order CLICK HERE

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