GST registration cancellation upheld after petitioner failed to prove business operations at declared address

The Kerala HC dismissed a petition challenging GST registration cancellation. The petitioner failed to conduct business from the declared address and issued invoices without actual supply of goods/services. The court found no violation of natural justice principles as the petitioner was given adequate opportunity to present his case but failed to provide convincing evidence of business operations from the declared premises. The landlord's statement confirmed no business activity occurred after May 2017, and the petitioner neither filed documents for change of business address nor supported his claims with documentary or oral evidence. The court held that GST enquiry proceedings are summary in nature to verify business operations at declared addresses.

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Issues Involved:
1. Legality of the cancellation of GST registration.
2. Alleged violation of principles of natural justice.
3. Opportunity to cross-examine the landlord.

Summary:

Issue 1: Legality of the cancellation of GST registration
The petitioner, a partnership firm engaged in trading iron and steel items, sought quashing of orders (Exts. P4 and P5) canceling its GST registration effective from 1st July 2017. The cancellation was based on the powers conferred under Section 29(2)(e) read with Rule 21(a) of the CGST/SGST Act, 2017, citing reasons that the petitioner did not conduct any business from the declared place of business and issued invoices without the supply of goods or services. Despite the petitioner's reply to the show cause notice, the registration was canceled. The court noted that the State Tax Officer had the power to cancel the registration if no business activity was carried out from the declared place of business, and the petitioner failed to produce convincing proof of conducting business from the said premises.

Issue 2: Alleged violation of principles of natural justice
The petitioner contended that the impugned orders were illegal, arbitrary, and unjustified, arguing that there was a violation of principles of natural justice as they were not given the opportunity to cross-examine the landlord whose statement was relied upon. The court referred to Section 29 and Rule 21(a) of the GST Rules, emphasizing that the proper officer must provide an opportunity of being heard before canceling the registration. However, the court determined that the petitioner was given such an opportunity but failed to produce evidence supporting their claim of conducting business from the declared premises.

Issue 3: Opportunity to cross-examine the landlord
The petitioner argued that the landlord's statement, which indicated that no business was conducted from the premises after May 2017, should have been subject to cross-examination. The court cited the Supreme Court's judgment in State of Kerala v K.T. Shaduli and Nallakandy Yusuff, which supports the right to cross-examine witnesses. However, the court found that the enquiry conducted by the competent officer was a summary proceeding, not a trial, and the petitioner did not produce any contrary evidence. The court concluded that there was no infraction of the principles of natural justice or arbitrary action by the authority.

Conclusion:
The writ petition was dismissed, with the court holding that the petitioner failed to prove the continuation of business activities from the declared place of business. The petitioner was advised to file an appeal under the relevant provisions of the GST Act if aggrieved by the order.

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