GST Registration cancellation on account of fake documents and a non-existent place of business, is valid.

The Hon’ble Telangana High Court in M.A. Enterprises v. Additional Commissioner (Appeals) [W.P. No. 27283 of 2025 dated October 7, 2025] held that the GST registration was rightly cancelled under Rule 22(3) of the Central Goods and Services Tax Rules, 2017(“the CGST Rules”) by the adjudicating authority because the taxpayer could not prove the existence of the declared business premises and had submitted doubtful rental documents.

Facts:

M/s. M.A. Enterprises (“the Petitioner”) received the GST registration cancellation order (“the Impugned order”) dated March 11, 2025 with effect from January 31, 2025. The cancellation was done under Rule 22(3) of the CGST Rules, because the petitioner was not carrying out any business at the declared place of business. The petitioner filed an appeal before the appellate authority, which was also rejected on the grounds that during inspection, there was no business entity by the name M/s. M.A. Enterprises at the registered premises.

Aggrieved, the petitioner filed this petition.

The petitioner submitted that the impugned order is arbitrary and in violation of the principles of natural justice. It has been passed contrary to the third proviso to sub-section (2) of Section 29 of the Central Goods and Services Tax Act(“the CGST Act”). Also, the cancellation of registration made with retrospective effect is not justified. It was also submitted that the appellate authority has rejected the appeal without appreciating the grounds of appeal.

Whereas, the respondent submitted that the owner of the previous premises, against which registration was obtained, has denied renting the premises to the petitioner at any point in time and has stated that the rental agreement is a forged document. Also, the petitioner submitted two rental agreements on two different dates, which creates serious doubts and contradictions regarding the GST Registration.

Issues:

Whether GST Registration cancellation on account of fake documents and a non-existent place of business, is valid?

Held:

The Hon’ble Telangana High Court in W.P. No. 27283 of 2025 held as under:

• Held that, the findings of the appellate authority do not need corrections because there were forged rental agreements about the declared place of business at the time of registration.
• Held that, cancellation of GST registration of the petitioner has also been made on the ground that the petitioner has not conducted any business from the declared place of business, which is in contravention of Rule 21A of the CGST Rules.

Therefore, the Hon’ble High Court refused to interfere with the cancellation of the petitioner’s GST registration.

Our Comments:

Rule 21A of the CGST Rules: Suspension of registration.-

(1) Where a registered person has applied for cancellation of registration under rule 20, the registration shall be deemed to be suspended from the date of submission of the application or the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for cancellation of registration under rule 22.

(2) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29 or under rule 21, he may suspend the registration of such person with effect from a date to be determined by him, pending the completion of the proceedings for cancellation of registration under rule 22.

The Hon’ble Bombay High Court in Afzal Husain Altaf Husain Saiyed v. Union of India [2025 (6) TMI 1791 - BOMBAY HIGH COURT]held that there were concurrent findings of fact by adjudicating authorities that the suppliers in question were found to be non-existent on physical verification. The Hon’ble High Court observed that the petitioner failed to furnish any documentary evidence before the authorities to establish that the transactions of purchase and sale were genuine. The Court further noted that no perversity had been demonstrated in the findings of the lower authorities, and hence no interference with the cancellation of the GST registration order was warranted.

 (Author can be reached at [email protected])