The Kerala High Court has ruled that, GST Authority has No Power to cancel the registration of a person for Reasons not specified in the GST Act. The High Court directed the GST Authority to restore the GST registration as the receipt of the building tax was not considered.
Advocate Aji V. Dev drew attention to the order of cancellation of registration and submitted that respondents have invoked provisions under Sub Section (2) of Section 29 of the CGST/SGST Act, 2017 for cancellation of registration of the petitioner. However, the reasons stated in the impugned order are not in consonance with the powers conferred by the respondents for cancellation of registration. It is further submitted by the learned counsel appearing for the petitioner that the order for rejection of application for revocation of cancellation also suffers from non-application of mind and it is an unreasonable order, without mentioning any reason for rejection of application for revocation of cancellation. Learned counsel appearing for the petitioner submitted that the petitioner has honestly given all necessary particulars in the application for registration of and no case is made out by the respondents that the registration has been obtained by the petitioner by means of fraud, willful misstatement or suppression of facts.
The single-judge bench of Justice A.M.Badar noted that the State Tax Officer, Pala is the proper officer for assessment and he is a competent officer to invoke provisions of Rule 25. The State Tax Officer, Pala is also the registering authority of the petitioner. This officer has issued a notice to cancel the registration of the petitioner in FORM GST REG 17, based on the report of the intelligence officer. It is clear that the State Tax Officer, Pala has himself not conducted any enquiry as contemplated in Rule 25. He proceeded further to cancel the registration, despite the fact that the petitioner was aggrieved by the report of the intelligence officer as seen from the reply tendered by the petitioner.
The court held that The proper officer, as such, ought not to have proceeded ahead with the cancellation of the registration on the basis of a report of the intelligence officer. The proper officer ought to have independently assessed the situation, particularly, when the petitioner had produced the receipt of the building tax from the local authority to prove the authenticity of his stand. This seems to have not been done by the proper officer. Without considering this document, the registering authority had canceled the registration. The application for revocation of cancellation of registration is also rejected by the respondent without proper enquiry in the matter.
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