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GST registration cancellation set aside due to improper physical verification and violation of natural justice principles The HC set aside the cancellation of petitioner's GST registration due to improper physical verification of premises and lack of adequate hearing ...
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GST registration cancellation set aside due to improper physical verification and violation of natural justice principles
The HC set aside the cancellation of petitioner's GST registration due to improper physical verification of premises and lack of adequate hearing opportunity, constituting violation of natural justice principles. The court found the impugned orders adversely affected petitioner's business prospects. Petitioner's counsel did not press the refund rejection challenge as appeal was pending. The court granted liberty to pursue remedy regarding the refund appeal. Petition was allowed and impugned order was set aside.
Issues involved: The judgment deals with the cancellation of GST registration of the petitioner and subsequent legal proceedings challenging the cancellation orders.
Cancellation of GST Registration: The petitioner's GST registration, initially granted on 25.08.2018, was canceled on 09.04.2022 due to discrepancies noticed during physical verification. The petitioner's response highlighted that the registration was for a specific project in Punjab, and the discrepancies were due to renovation work at the premises. The cancellation order was criticized for lacking proper reasoning and examination of the renovation details.
Revocation Application and Appeals: Following the cancellation, the petitioner filed for revocation under Section 30 of the CGST Act, 2017, citing improper consideration of their reply. However, the revocation application was dismissed on the grounds of lack of renovation evidence and failure to appear for a hearing. Subsequent appeals were also unsuccessful, with authorities questioning the petitioner's business activities and financial records.
Legal Observations and Conclusion: The High Court observed that the authorities took a technical approach, overlooking the specific circumstances of the case. The petitioner's argument that the premises were a residential house and not directly linked to the partnership firm was considered. The Court noted discrepancies in the reasoning provided for the revocation and emphasized the importance of proper verification procedures.
Judgment and Relief: The Court allowed the writ petition, quashing the orders of cancellation and dismissal of revocation. The registration of the petitioner was reinstated, acknowledging the adverse impact on their business. The petitioner was granted liberty to pursue further remedies regarding the rejected refund order. The judgment aimed to rectify the procedural shortcomings and restore the petitioner's registration status.
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