Physical Verification for GST Registration carried out in the absence of assessee’s authorized representative is not valid: Delhi HC quashes Cancellation Order [Read Order]

In a significant decision, the High Court of Delhi held that Physical verification for GST registration carried out in the absence of the assessee’s authorised representative is not valid and quashed the cancellation order of the Commissioner, Delhi Goods and Service Tax.

A Coram of Mr Justice Rajiv Shakdher and Ms Justice Tara Vitasta Ganju observed that in the matter of registration under the GST Acts, the application of the trader has to be considered properly and proper opportunity shall be given to the applicant in the event of any negative approach by the authorities. 

The respondents/revenue suspended the registration of the petitioner, M/s Curil Tradex Pvt. Ltd w.e.f. the date of the issuance of the show cause notice. Mr Sameer Vashisht, who appears on behalf of the respondents/revenue, states that the inspection, albeit, without the presence of the petitioner‟s authorized representative, was carried out on 13.04.2022 and the verification report was uploaded on 18.04.2022.

 Mrs Manish‟s contended that since the petitioner deals with scrap material, there was a constant movement of material which is brought into the business premises and argued that the photographs appended by the respondents/revenue, by themselves, would not establish that the petitioner does not carry out any business activity at the subject premises. 

Further argued that the authorized representative of the petitioner has been made to remain present at the business premises, the circumstances obtained at the site could have been explained by the said representative.

The Court observed 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 such eventuality, a prior notice/intimation would have to be served by the proper officer.

The writ petition was disposed of by allowing the petitioner to apply for revocation of the order of cancellation within the next 15 days and held that “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.”

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