2021 (4) TMI 505 - HC - GST

GST registration cancellation upheld on lack of evidence for goods transportation

M/s Om Trading Company Versus Deputy Commissioner of State Tax and others

The appellate authority affirmed the cancellation of GST registration due to lack of evidence supporting physical goods transportation, despite the ... Cancellation of registration of petitioner - inter-state sale - allegation that appellant failed to prove his e-way transaction details - opportunity of hearing provided or not - principles of natural justice - HELD THAT:- The detailed enquiry was conducted before passing the impugned order, in which certain discrepancies were found with regard to the business of the appellant. It was found that the appellant had failed to prove eway bill transaction details, therefore, the registration was cancelled. A proper opportunity of hearing was afforded to the appellant. No cogent documentary evidence is available on record to justify the stand taken by the appellant. The learned Single Judge has rightly come to the conclusion and dismissed the writ petition. Issues:Challenge to order of cancellation of GST registration based on alleged violation of Central Goods and Services Tax Act, 2017 and Rules of 2017.Analysis:1. Facts and Background: The appellant, a registered dealer under the Central Goods and Services Tax Act, received a show cause notice alleging business conducted only on paper without actual goods transportation. The notice cited violations of the Act and Rules, leading to cancellation of registration.2. Appellant's Arguments: The appellant contended that the cancellation was arbitrary, emphasizing physical transportation of goods supported by e-way bills and invoices. Allegations of coercion in tax collection were raised, challenging the cancellation as unjust and without proper jurisdiction.3. Judicial Precedents: The appellant relied on Kerala High Court judgments to argue against detention of goods solely based on route deviations when valid e-way bills exist, highlighting the importance of adherence to statutory provisions.4. Respondent's Position: The respondents, through the Government Advocate, argued lack of evidence showing physical transfer of goods from Agra to Gwalior. They emphasized the absence of toll plaza receipts and questioned the choice of a longer transportation route.5. Court's Analysis: The Single Judge upheld the cancellation order, noting the lack of proof of physical goods transfer and the appellant's failure to produce required documents. The judgment highlighted the thorough enquiry conducted before cancellation and the opportunity of hearing provided to the appellant.6. Legal Provisions: The judgment referenced Rule 21 and Rule 22 of the Rules of 2017, outlining grounds for cancellation of registration and the procedural requirements for such cancellations.7. Conclusion: The appellate authority's decision to affirm the cancellation order was deemed appropriate, as the appellant failed to substantiate claims of physical goods transportation. The court dismissed the writ appeal, finding no fault in the decisions of the Single Judge and the appellate authority.