Disability Of Taxpayer From Filing Requisite Form To Record Change Of Place Of Business Is No Basis For Not Restoring GST Registration: Delhi HC

While restoring the GST registration of Shiv Ganga Udyog (petitioner), the Delhi High Court ruled that the petitioner's inability to file the necessary form to record the change of place of business cannot serve as a valid reason for not restoring its GST registration.

The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that the petitioner had initially stated that he had shifted after his registration was cancelled and therefore was unable to file the requisite forms.

However, since this contention was not addressed, the Bench acknowledged that if a taxpayer's GST registration is cancelled, they are indeed disabled from filing the necessary forms.

“Insofar as the discrepancies in the tax returns and tax liability is are concerned, that too cannot be a ground for cancellation of the petitioner’s GST registration. The authorities have to proceed in accordance with law in assessing the correct liability, in the event there is any ground to believe that the taxpayer has not truly disclosed the same”, added the Bench.

Advocate Rakesh Kumar appeared for the Petitioner, whereas Advocate Anushree Narain appeared for the Respondent.

The brief facts of the case were that the petitioner's GST registration was cancelled following a cryptic show cause notice. The response provided by the petitioner to the show cause notice was also vague. The Proper Officer thoroughly considered the response and proceeded to cancel the petitioner's GST registration. Subsequently, the petitioner applied for the revocation of the cancellation of its GST registration and informed the authorities about the shift in its principal place of business. The application for revocation was rejected by the Proper Officer primarily because the petitioner had relocated its place of business to a new address, but this change was not reflected as an additional place of business in the requisite form. As a result, the GSTIN related to the previous address could not be restored.

After considering the submission, the Bench emphasized that discrepancies in tax returns and tax liability should not be a ground for the cancellation of the petitioner's GST registration. Instead, the authorities should follow the appropriate legal procedures to assess the correct tax liability if there are reasonable grounds to believe that the taxpayer has not accurately disclosed it.

The Bench further found that the petitioner had claimed that he had disclosed the bank details and the HSN of the goods because he had migrated from a VAT regime. However, the same was not accepted.

“The Appellate Authority had proceeded on the basis that the petitioner had not declared the classification of the goods dealt with by him. In such an eventuality, the apposite course would be to call upon the petitioner to correctly disclose the goods, however, no such communication was issued while the petitioner’s GST registration was active”, added the Bench.

Therefore, since the petitioner was disabled from taking any corrective measures, even if it desired to do so, the High Court allowed the petition and directed that petitioner’s GST registration be restored forthwith.

Cause Title: Shiv Ganga Udyog Through Its Proprietor v. Commissioner of Central Goods and Services Tax and Others [Neutral Citation: 2023: DHC: 6325-DB]

Click here to read/download the Order