The Jammu and Kashmir & Ladakh High Court recently held that a Goods and Services Tax (GST) registration issued to the assessee and then canceled upon request cannot be revoked merely based on the property disputes with the brother of the applicant.
The appellant approached the High Court to seek restoration of the licenses issued to the Samci Restaurant, which was canceled by the State Taxes Officer, GST, and the Assistant Commissioner, Food, Safety, Department of Drug and Food Control Organization, J&K.
Both the Food Safety and Tax Licenses of the petitioner’s restaurant were canceled at the request of the petitioner’s brother. A Writ Petition was preferred to the Jammu & Kashmir and Ladakh High Court in this regard.
The appellant, aggrieved by the decision in the writ petition seeking revocation of registration, filed the present appeal for the consideration of the division bench of Jammu & Kashmir and Ladakh High Court.
The respondents-revenue submitted that the electricity connection, registration of the shop under the Shops Establishment Act and the receipt of taxes paid by the petitioner’s brother was duly submitted and taken into consideration for cancellation of the registration.
It was submitted by the Advocate General D C Raina appearing for the Union Territory of Jammu & Kashmir that, there is no possibility of fraud having been played by any third person in seeking cancellation of the registration. The reason was stated as the cancellation process being online, demands submission of certain confidential information that would not have been with anyone but the appellant.
On behalf of the appellant, Advocate M. A. Qayoom and Advocate Mian Tuffail submitted that the application for cancellation of registration of Samci Restaurant has been fraudulently shown to have been filed by him when the same appears to be the mischief of some of his employee-accountant. The said application is stated to have not been decided so far.
The court took note of the persistent property dispute between the brother of the appellant and the appellant himself and restrained itself from going into the merits of that matter.
Observing that the proper course in law was to leave the concerned authority free to decide as to who, out of the two, fulfills the criteria for holding a license, the High Court held that “registration of the business unit, the same stands canceled” and restricted the operation/running of the Restaurant until the license has been granted in favor of the deserving party.
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