Inability of Taxpayer to File Requisite Form to Declare Change of Address cannot be used as a Justification for not restoring GST registration: Delhi HC [Read Order]

In a recent ruling, the Delhi High Court instructed the Goods and Services Tax Authorities to reinstate the GST registration of the petitioner and pointed out that the taxpayer's incapacity to submit the necessary form to update their address should not be considered as a valid reason for denying the restoration of GST registration.

The petitioner,  Shiv Ganga Udyog has filed the present petition impugning an order passed by the Appellate Authority (Commissioner of Central Tax Appeals-II, Delhi) whereby the petitioner’s appeal against an order passed by the Proper Officer, was rejected. 

The proper officer rejected the petitioner’s application for revocation of cancellation of his GST registration and the same was rejected by the appellate authority also.

The petitioner’s GST registration was cancelled by an order dated 22.07.2022, pursuant to a Show Cause Notice dated 13.06.2022. The only reason provided in the said Show Cause Notice reads as “Discrepancies noticed while conduct of Physical Verification”.

The petitioner was directed to furnish his reply within seven working days from the date of service of the said Show Cause Notice and further appear before the concerned officer on 23.06.2022. As the SCN was not clear, the petitioner-taxpayer replied to the SCN in a vague manner that “the dealer is ready to provide information and full cooperation”.

The Proper Officer gave full consideration to the said response and cancelled the petitioner’s GST registration for the reasons that the reply submitted by the taxpayer was not found satisfactory as he didn’t explain why the GST registration shall not be cancelled.

The principal ground for not restoring the petitioner’s GST registration is that the petitioner had shifted his premises and had not filed the requisite form. The petitioner had, at the initial stage, stated that he had shifted after his registration was cancelled and therefore, was unable to file the requisite forms. This contention was not addressed. Concededly, if a taxpayer’s GST registration is cancelled, he is disabled from filing the necessary forms.

Considering the facts and submissions, the bench of Justice Vibhu Bakhru and Justice Amit Mahajan stated that “If the petitioner is disabled from filing the requisite form to record the change of place of business, the same cannot be considered as a ground for not restoring its GST registration. More particularly, since the same was not the ground on which the petitioner’s GST registration was cancelled in the first place.”

Regarding the other issues, in the tax returns and tax liability is concerned, the bench stated that too cannot be a ground for cancellation of the petitioner’s GST registration. It was further mentioned that the authorities have to proceed in accordance with law in assessing the correct liability, in the event there is any ground to believe that the taxpayer has not truly disclosed the same.

The bench set aside the impugned orders and directed the authorities to restore the GST registration. It was also clarified that the respondents are not precluded from taking such steps, albeit, in accordance with law, if they are of the view that the petitioner’s registration is required to be cancelled or any other measures are required to be taken.

To Read the full text of the Order CLICK HERE

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