GST registration cancellation needs a proven statutory ground; absence of stock alone cannot sustain revocation refusal.

GST registration cannot be cancelled merely because no stock is found at the premises when filed returns and disclosed turnover indicate business activity. Cancellation under Section 29(2) of the Uttar Pradesh GST Act requires a statutory ground to be actually established, and the authorities must examine whether the returns were fraudulent or filed only to claim input tax credit. As that exercise was not reflected in the record and the adverse findings were treated as unsustainable, the cancellation order, the rejection of revocation, and the appellate order were set aside.

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Issues: Whether cancellation of GST registration and rejection of revocation were sustainable when the assessee had filed returns showing business turnover and the authorities relied mainly on absence of stock at the premises and alleged mismatch in rent documents.

Analysis: Cancellation of registration under Section 29(2) of the Uttar Pradesh Goods and Services Tax Act, 2017 requires the existence of one of the statutory grounds. The record showed that the assessee had filed returns for the relevant financial years and the authorities did not dispute the disclosed business activity. The finding that no stock was found at the premises was not by itself sufficient to conclude that no business was carried on. Before taking the drastic step of cancellation, the authorities were required to examine whether the statutory grounds were actually established and whether the returns were fraudulent or intended only to claim input tax credit. The orders did not reflect such examination and the adverse findings were treated as perverse.

Conclusion: The cancellation order, the order rejecting revocation, and the appellate order were unsustainable and were set aside.

Ratio Decidendi: GST registration cannot be cancelled on a mere inference from absence of stock at the business premises where filed returns and disclosed turnover indicate business activity, unless a statutory ground under Section 29(2) is actually established.

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