GST Registration cannot be cancelled without proper verification of the supporting evidence

The Hon’ble Orissa High Court inM/S. JAY JAGANNATH FILLING STATION VERSUS COMMISSIONER OF SALES TAX (CT & GST) AND ANOTHER - 2025 (5) TMI 1432 - ORISSA HIGH COURTset aside the GST Registration Cancellation Order as the documents submitted by the Assessee demonstrated that they were existing and carrying on their business operations at the declared place of business regularly. Accordingly, the matter was remanded back to the Assessing Officer for reconsideration.

Facts:

M/s. Jay Jagannath Filling Station (“the Petitioner”) challenged the Assessment Order (“the Impugned Order”) passed by the State Tax Officer (“the Respondent”), cancelling the GST Registration on the sole ground that business was not conducted at the declared place of business.

The Petitioner contended that they were existing in the same place of business and carrying on such business regularly. Additionally, they also submitted an affidavit enclosing invoices from Indian Oil Corporation and photographs showing ongoing business activities at the same premises. They further argued that the Respondents had visited their premises post-cancellation, despite the business continuing operations. On the other hand, the Respondent submitted that the registration was cancelled because the Registering Authority found that the business was not operating at the declared place.

Hence, aggrieved by the Impugned Order, the Petitioner filed the present Writ Petition.

Issue:

Whether GST registration can be cancelled without proper verification of the supporting evidence?

Held:

The Hon’ble Orissa High Court in M/S. JAY JAGANNATH FILLING STATION VERSUS COMMISSIONER OF SALES TAX (CT & GST) AND ANOTHER - 2025 (5) TMI 1432 - ORISSA HIGH COURTheld as under:

• Observed that, the documents placed on record by way of additional affidavit by the Petitioner demonstrated that the business has been conducted till date from the said premises. The Court further noted that no objection has been raised by the Respondent in this regard.
• Noted that, to appreciate the factual aspects, the matter needs to be remitted to the assessing authority concerned for consideration of evidence and inspection ought to be done with regard to existence of business at the declared place.
• Held that, the Respondent ought to reconsider the matter, taking into account the documents furnished before this Court by way of additional affidavit. The Court also directed the Petitioner to appear before the Respondent with documents for hearing and the Respondents were directed to take a fresh decision in this regard, if required.

Our Comments:

Section 29 of the Central Goods & Services Tax Act, 2017(“the CGST Act”) governs “Cancellation or suspension of registration”. Further, Section 29(2)(c) of the CGST Act empowers the proper officer to cancel the registration of a person if the business is found to be discontinued or not conducted from the declared place. However, such power must be exercised only after due verification and in adherence to the principles of natural justice.

In a pari materia case of OLIVE TRADERS VERSUS THE COMMISSIONER, CGST AND ANR. - 2024 (7) TMI 805 - DELHI HIGH COURT, the Hon’ble Delhi High Court set aside the impugned order cancelling the petitioner's GST Registration which was made solely on a postal remark of 'no such firm found.' The Court held that such action without proper verification or hearing violates principles of natural justice. It directed restoration of registration and emphasized the need for independent inquiry before cancellation.

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