The Delhi High Court has set aside the order of cancellation of GST registration due to No notice served prior to inspection of premises.
The petitioner, Micro Focus Software Solutions India Private Limited received a show-cause notice stating that not being found functioning or existing at the given address. The petitioner in response to show cause notice replied that from December 2019 month onwards, the company discontinued its business operations in Delhi and therefore, had not renewed the lease agreement. However, the company did not apply for cancellation of GST registration on grounds of practical business challenges.
The petitioner further submitted before the department through its reply that the company is in the process of preparing and filing Form GSTR-9 and GSTR-9C for FY 2018-19 which is due for filing by 31 December 2020 and would apply for cancellation of registration suo-moto post-filing of GSTR-9 and GSTR-9C for FY 2018-19 and furnishing of refund claim against excess payment of tax made during FY 2018-19.
The respondent without considering the reply canceled the GST registration of the company. The aggrieved petitioner applied for revocation of cancellation, which was also dismissed by the department. Hence the petitioner filed a writ petition against the order of the department for cancellation of GST registration and against the dismissal of the application for revocation of such cancellation.
Mr Harish Bindumadhavan, advocate appears on behalf of the petitioner submitted that there has been a complete violation of principles of natural justice. As per Rule 25 of the Central Goods & Service Tax Rules, 2017, before carrying out a physical inspection, notice had to be given to the petitioner. The counsel for the appellant further submitted that no such notice was given to the appellant.
The division bench presided by Mr. Justice Rajiv Shakdher and Ms. Justice Poonam A. Bamba has observed that the petitioner, admittedly, filed a reply, in which reasons were set out as to why the petitioner wished to continue with its registration. When the GST registration cancellation order was passed, the concerned officer had with him the reply filed by the petitioner. But there is no reference to the said reply or the reasons set out therein, in the cancellation order.
The High Court further observed that the order whereby the application for revocation was rejected shows that an inspection was carried out on the premises of the petitioner. Rule 25 requires an inspection to be done in the presence of the person whose property is being inspected; it was not done as the petitioner had no notice of the inspection.
The High Court, for the foregoing reasons, set aside the cancellation of GST registration and dismissal of the application for revocation of cancellation.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
