Tax Authorities Must Review Registration Cancellation Application Within Six Weeks Following Procedural Guidelines and Statutory Compliance

HC ruled on tax registration cancellation, directing tax authorities to decide on the petitioner's revocation application within six weeks. The case involved allegations of fraudulent activities and non-existence of business. Without examining case merits, the court focused on procedural compliance and mandated timely resolution of the pending application under statutory provisions.

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Issues:
1. Cancellation of registration under the Central Goods and Services Tax Act, 2017 based on non-existence of business and fraudulent activities.

Analysis:
The petitioner filed a petition seeking to set aside an order dated 1.12.2021, which cancelled their registration under the Central Goods and Services Tax Act, 2017. The cancellation was based on the findings of the Anti-Evasion team that the petitioner's firm was non-existent, not conducting business from the principal place, and engaged in fraudulent activities related to Input Tax Credit (ITC). The petitioner argued that a similar show cause notice was issued earlier but dropped, only to receive another notice leading to the impugned order.

The court noted that the earlier show cause notice and the impugned order were based on different grounds. The earlier notice focused on the non-existence of the firm and lack of business operations, while the subsequent notice mentioned fraud, wilful misstatement, or suppression of facts. The court refrained from delving into the merits of the case, as the petitioner had filed a revocation application under section 30 of the Act, which remained pending. Section 30 allows aggrieved parties to apply for revocation of registration cancellation within thirty days.

The court directed the competent authority to decide on the revocation application within six weeks, emphasizing adherence to the statutory provisions. Despite acknowledging the background facts, the court abstained from expressing any opinion on the factual aspects. Ultimately, the petition was allowed, and the rule was made absolute for the specified relief, with direct service permitted.

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