In a recent case,the Andhra Pradesh High Court stated that the petitioner can challenge cancellation of GST (Goods And Service Tax) registration by availing remedy under Section 30 of CGST (Central Goods And Service Tax) Act and disposed of the writ petition.
Madeena Steels,the petitioner/assessee, proprietor engaged in business of purchase and sale of iron scrap and have been regularly paying monthly returns after availing ITC(Input Tax Credit) as per GST Act, 2017. A show cause notice was served on 23.06.2023 by the 1st respondent stating that the suppliers availed ITC without actually receiving the goods and passed on this credit to the petitioner without supplying the goods and proposed to cancel the registration of the petitioner.
The petitioner contended that if the 1st respondent claims of fake invoices and ITC without goods movement are accepted, then no goods were purchased. As a result, there could be no sales, because without receiving goods, goods cannot be sold.Therefore, if the 1st respondent questions the purchases, sales should also be questioned. Without considering the contention raised by the petitioner the registration was canceled. Aggrieved by the decision, a writ petition is filed.
The petitioner counsel argued that the petitioner had not engaged in bogus transactions to help suppliers claim ITC fraudulently and the petitioner had not been provided with those reports on the basis of which the show cause notice was issued. This had prevented the petitioner from effectively responding and this is a clear violation of natural justice.
Contrary to the argument, the Government Pleader for Commercial Taxes stated that writ petition is not maintainable as the petitioner has alternative remedies, such as filing petition under Section 30 of the APGST (Andhra Pradesh Goods and Service Tax) Act or appealing under Section 107 of the Act. The Government Pleader argued that the petitioner cannot claim non-supply of information or a violation of natural justice principles.
A division bench of Justice, U.Durga Prasad Rao and A V Ravindra Babu, hearing both the sides,disposed of the writ petition stating that by filing an application under Section 30 of the GST act for revocation of cancellation or for challenging the order an appeal can be filed to seek remedy.
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