GST Registration obtained by fraud and suppression of fact: Calcutta HC sets aside cancellation finding existence of Premises [Read Order]

In a recent case, the Calcutta High Court set aside the cancellation, finding existence of premises. The cancellation was made on finding that the GST registration was obtained by fraud and suppression of fact.

Shree Balaji Polycon, the petitioner challenged the order of cancellation of registration under the provisions of West Bengal Goods and Services Tax Act (WBGST, 2017 ( “said Act”) dated 17th February 2023, the order rejecting the application for revocation of cancellation dated 15th May 2023 and the order rejecting the appeal filed under Section 107 of the said Act dated 21st May 2024, the instant writ petition has been filed.

Upon hearing the parties, by order dated 21st August 2024 the Court considering the case made out by the petitioners had directed the State respondents to make further enquiry as regards the place of business of the petitioner no. 1 and to file a report before the Court by taking note of the agreement dated 30th August 2022 executed between the petitioner no. 1 and the landlady, Mrs. Manorama Dutta. Pursuant to the aforesaid, the respondents had conducted a physical verification of the business premises of the petitioner no. 1 in accordance with rule 25 of the WBGST /CGST Rules, 2017.

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Since, during the physical verification the petitioners could not provide certain documents as called for by the authorities, the petitioners sought for some more time. Unfortunately, the report as directed was prepared on 24th September 2024 and filed by the respondents in Court.

Later, on the basis of application being CAN 1 of 2025 filed by the petitioners, the Court, noting the submissions of Mr. Dalapati advocate appearing for the petitioners that the petitioners have filed further documents as called for by the respondents including the original leave and license agreement dated 30th August 2022 and the copy of the death certificate of Late Biswanath Dutta and the consignment note from ATC Global Logistics, had directed the State respondents to file a fresh report by an order dated 21st February 2025.

The original has also not been produced. It is unfortunate to say the least that a report is being filed by the respondents in such a casual manner. Be that as it may, since it is not necessary to hold back the petitioners further having regard to the disclosure made in the report, the court proceeds to consider the said report and the writ petition. From a perusal of the aforesaid report, it would transpire that the business entity of the petitioner no. 1 is found existing at the particular notified address.

The court found that the initial show cause had been issued on 6th January 2023 on the ground that the registration of the petitioner no. 1 had been obtained by reason of fraud, willful misstatement and suppression of fact. It was evident that in the course of the earlier visit on 4th January 2023 the business activity of the petitioners at the business premises notified in the registration form could not be verified, the proceeding was initiated which culminated in the cancellation of registration.

Since the business premises of the petitioner no.1 is found to be in existence, Justice Raja Basu Chowdhury viewed that the cancellation of registration cannot be permitted to continue. The court set aside the order of cancellation of the petitioner no.1’s registration effected vide order dated 17th February 2023. The jurisdictional officer is directed to restore the petitioner no.1’s registration on the portal.

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