The Madras High Court has held that the GST registration cannot be cancelled for mere discrepancies in door number of place of business.
The bench of Justice Krishnan Ramasamy has observed that the department is supposed to consider the bonafide of the petitioner and they should have obtained an affidavit from the petitioner with regard to the discrepancies, despite which, the GST Registration of the petitioner was cancelled by the respondent in a mechanical manner, which would ultimately affect the revenue of the Department.
Background
The petitioner has challenged the order of Rejection of Application for Revocation of Cancellation of GST Registration issued by the department.
The petitioner submitted that in the documents pertaining to the property tax, the Door Number of the petitioner’s place of business was mentioned as 67. However, as per the rental agreement, the Door No.67 was internally divided and the 1st floor, which was stated as 67A, was allocated to the petitioner’s sister, whereas, the 2nd floor, which was stated as 67B, was allocated to the petitioner. Hence, in the GST Portal, the Door Number of the petitioner’s place of business was provided as “67B” instead of “67”.
Due to the mis-match of the door number in the GST Portal and the property tax documents, the department had issued a show cause notice dated 25.06.2024, for which a detailed reply was filed by the petitioner on 03.07.2024. However, without considering the said reply, the GST Registration of the petitioner was cancelled by the department. The application filed by the petitioner for revocation of cancellation of Registration was also rejected by the petitioner.
The department submitted that due to the discrepancies in the door number of the petitioner’s place of business, the GST Registration of the petitioner was cancelled by the respondent and it was confirmed by the order.
Conclusion
The court while quashing the order revoked the cancellation of GST Registration of the petitioner. The restoration of the GST registration is subject to and conditional upon fulfilling various conditions.
Firstly, the department shall take suitable steps by instructing GST Network, New Delhi to make suitable changes in the architecture of the GST Web portal to allow the petitioner to file the returns and to pay the tax/penalty/fine, within a period of four weeks from the date of receipt of a copy of this order.
Secondly, the petitioner is directed to file returns for the period till date, if not filed, together with tax dues along with interest thereon and the fee fixed for belated filing of returns within a period of 4 weeks from the date of restoration of GST Registration of the petitioner.
Thirdly, it is made clear that such payment of tax, interest, fine/fee etc. shall not be allowed to be made or adjusted from and out of any Input Tax Credit (ITC) which may be lying unutilized or unclaimed in the hands of the petitioner.
Fourthly, if any ITC has remained unutilized, it shall not be utilised until it is scrutinised and approved by an appropriate or competent officer of the Department.
Fifthly, only approved ITC shall be allowed to be utilised for discharging future tax liability under the Act and Rules.
Sixthly, if any ITC was earned, it shall be allowed to be utilised only after scrutinising and approving by the respondent or any other competent authority.
Lastly, if any of the conditions is not complied with by the petitioner, the benefit granted under this order will automatically cease to operate.
Case Title: M/s.Professional Car Decors v/s The Superintendent of CGST & C.Ex
Citation: W.P.No.26367 of 2024 & W.M.P.Nos.28822 & 28823 of 2024
Counsel for the Petitioner: Ms.S.Akila
Counsel for the Respondent: Rajnish Pathiyil
Decision Date: 12.09.2024
