GST: Physical Verification of Premises for granting Registration without Notice Violates Natural Justice Principles, rules Delhi HC [Read Order]

In a significant ruling, the Delhi High Court has held that the physical verification of the business premises without notice for granting GST registration would be invalid as the same is in violation of the principles of natural justice.

The department cancelled the GST registration of the petitioner, M/s Curil Tradex Pvt Ltd, on the basis of the show cause notice, in turn, refered to a letter received from the Deputy Commissioner (DC), CGST— Delhi South Commissionerate. The respondents/department suspended the registration of the petitioner w.e.f. the date of the issuance of the show cause notice.

The petitioner contended that if the proper officer opted for physical verification of the petitioner's business premises, it could only be carried out in the presence of its authorized representative. In other words, in this eventuality, a prior notice or intimation would have to be served by the proper officer.

The division bench of Justice Rajeev Shakdher and Justice Taravitasta Ganju observed that “A careful perusal of the rule shows that, if after the grant of registration, the proper officer is satisfied that physical verification of the place of business of the concerned person is required, the proper officer may get such verification of the business place carried out, albeit, in the presence of the said person, and thereafter, have the verification report along with other documents including photographs uploaded in Form GST REG30 on the common portal within 15 working days following the date of such verification.”

“In the instant case, what is not in dispute is that physical verification was carried out by the respondents/revenue, albeit, without having the petitioner’s authorized representative remain present; although, concededly, insofar as the second part of the rule is concerned, which required uploading of the verification report and other documents including photographs, we are told that the same was done,” the Court added

Thus, having regard to the overall circumstances obtaining in the case, the writ petition is disposed of with the following directions: (i) The petitioner will file an application for revocation of order of cancellation within the next 15 days. (ii) Once an application is filed, the same will be adjudicated by the concerned officer within two weeks of the date of submission of the application. (iii) A speaking order will be passed by the concerned officer; a copy of which will be furnished to the petitioner. (iv) In case the order passed by the concerned officer is adverse to the interests of the petitioner, the petitioner shall have liberty to take recourse to an appropriate remedy, albeit, as per law.

To Read the full text of the Order CLICK HERE

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CURIL TRADEX PVT. LTD vs COMMISSIONER, DELHI GOODS AND SERVICE TAX & ANR. , 2022 TAXSCAN (HC) 706 , Mrs Anjali Jha Manish , Mr Sameer Vashisht, Ms Sanjana Nangia