In a recent case before Allahabad High Court a writ petition was disposed of directing the department to furnish all documents mentioned in the Show Cause Notice ( SCN ) with respect to cancellation of GST registration of the petitioner.
The petitioner M/S Baba Industries filed a writ petition against the Respondent Union Of India through Secy. Ministry Of Finance, New Delhi. The petitioner’s counsel consisting of Advocates Mukesh Kumar Tewari,Devam Shukla and Vijay Dixit issued writ order in the nature of Certiorari, quashing the impugned Show Cause Notice ( SCN ) for cancellation of registration and suspension order.
The respondents counsel Advocate Anindya Shastri produced a print out of snap shot taken from the portal of one Kishor Kumar Chauhan showing his designation as Superintendent and a print out, which was in the form of a single piece of paper not evident as to what documents were uploaded on the website/ portal.
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A raid was conducted in the principal place of the business of the petitioner’s firm dealing with FMCG products. While interviewing a sales manager who has worked there for 2 years, he stated that he had never seen any trading being done in iron or paper scrap.
There were huge mismatches between amount of inward and outward supplies. The tax invoices showed the petitioner was dealing with waste and scrap paper, iron waste and scrap of plastic. The outward supplies of M/s Baba Industries have also been found to be either non-existent upon verification or have been found to be operated by Deepanshu Srivastava and his associates.
It was found that the petitioner was running fake and fraudulent operations for generating fake ITCs to be utilized by his associates.
The Court put forward a query to the counsel as to whether there was any provision in the Central Goods and Service Act for proceeding against a person if guilty of fraudulent operations after registration obtained in accordance with prescribed procedures.
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The petitioner failed to submit reply to the SCN. The petitioner’s counsel argued that the petitioner had initially replied to the SCN on 26.03.2024 and then again an additional reply was submitted on 10.04.2024. In both the replies the petitioner had asked for documents which was referred to containing specific details as mentioned in the SCN, and no such documents were submitted.
The petitioner’s counsel submitted that he was running 2 services and 5 businesses registered under the same GSTN and has 2 places of businesses registered for trading in FMCG products. But later on an application was filed for amending registration and adding and changing principal place of business.
The amendment was allowed by the competent under Central Goods and Service Act. The opposite parties failed to look into the amended registration of the petitioner.
The petitioner was arrested on 02.02.2024, and released on bail only because the department could not conclude the enquiry and submit a complaint to the concerned Magistrate. The department did not have any material against petitioner.
The SCN alleged that the petitioner’s GST registration was proposed to be canceled on account of fraud, but did not provide specific reasons as to the alleged fraud. The petitioner had responded denying all the allegations in the SCN.
The petitioner challenged final order of Delhi High Court in which the petitioner’s GST registration was canceled.
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The bench of Allahabad High Court comprising Justice Sangeeta Chandra and Justice Brij Raj Singh observed that inorder to protect the interest of petitioner the opposite party shall submit all documents referred in the SCN within 10 days of the order. The petitioner on receipt of such document shall submit a reply within 10 days.Thereafter the competent authority shall consider the reply and pass a reasoned and speaking order within 2 weeks of such submission.
Hence the writ was disposed of.
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