In a recent case, the Kerala High Court upheld the Goods and Service Tax (GST) cancellation order against Steel India due to submission of false details at time of migration of registration under Value Added Tax (VAT) to GST.
R.Sreejith, K.Krishna , Achyuth Menon , Padmanathan K.V. appeared for the petitioner. Adv. Jasmin M M appeared for the respondent.
Steel India, the petitioner has approached the Court challenging order cancelling the registration granted to the petitioner under the Central Goods and Services Tax/State Goods and Services Tax Acts, 2017 (CGST/SGST Acts) as also order of the Appellate Authority confirming the decision of the original authority.
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The petitioner was issued show cause notice calling upon the petitioner to show cause as to why the registration of the petitioner should not be cancelled for the reasons under Rule 21(a) – person does not conduct any business from declared place of business and Rule 21(b) – person issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made thereunder.
It was replied by the petitioner that the business operations have ceased temporarily w.e.f. 01.10.2022 and are not having any business w.e.f. 01.10.2022. The Place of Business declared in GST Registration is a rented place and there were some disputes with the landowner relating to rental payments, due to which the rental payments for a few months fell due. The petitioner stated that they intend to continue business when the business conditions improve.
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The original authority found that the explanation submitted by the petitioner was not satisfactory and therefore proceeded to cancel the registration of the petitioner. The petitioner preferred writ petition challenging the order of cancellation. The Court, after examining the contentions of the petitioner in detail, dismissed the writ petition by judgment.
The petitioner carried the matter to a Division Bench of the Court, wherein the permission was granted to approach the Appellate Authority by filing a statutory appeal. The Appellate Authority dismissed the appeal by order after considering each and every contention taken by the petitioner.
It was argued that the petitioner was actually conducting business at the premises in question till October, 2022. It is submitted that the petitioner had stopped business owing to financial difficulties. It is submitted that there is no material whatsoever to show that the petitioner issued invoices without actual supply of goods.
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The Government Pleader submitted that the petitioner has made out no case for restoration of the registration granted to the petitioner.
A single bench of Justice Gopinath P viewed that the petitioner has not made out any case for interference with the impugned orders. A perusal of order of the original authority will show that the contentions taken by the petitioner had been considered by the original authority, and there was a specific finding that the petitioner was not conducting business in the premises mentioned in the certificate of registration.
It was evident that, according to the statement recorded from the landlord of the petitioner, the premises in question were leased out to the petitioner for conducting iron and steel business from 2012 to May 2017, and thereafter no business had been conducted by the petitioner in the said premises. It is also seen that the premises were thereafter leased out by the landlord to another person, who had no relation whatsoever with the petitioner.
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The original authority therefore recorded that it is evident that the details provided at the time of migration from the registration under the VAT to GST were false and the registration of the petitioner is therefore liable to be cancelled.
The bench found that none of the documents produced by the appellant could not establish the existance of business place of the appellant and the appellant did not held or obtained any statutory documents like panchayath license, which is a mandatory one to run the business.
Since there is nothing on record to indicate that any of the findings recorded by the Appellate Authority are wrong, the court dismissed the writ petition.
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