Taxpayer Wins GST Registration Challenge: Minor Address Error Cannot Justify Arbitrary Cancellation of Business Credentials

Court found merit in petitioner's challenge to GST registration cancellation due to minor door number discrepancy. HC ruled the cancellation was mechanical and without considering petitioner's bona fide explanation. Registration was revoked subject to specific compliance conditions, including filing pending returns, paying dues, and obtaining approval for Input Tax Credit utilization. Writ petition disposed of without costs.

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Issues:
Challenge to Rejection of Application for Revocation of Cancellation of GST Registration, Restoration of GST Registration

Analysis:
The writ petition challenges the rejection of the application for revocation of the cancellation of GST registration by the respondent. The petitioner's counsel argued that a discrepancy in the door number of the petitioner's business premises led to the cancellation of registration. The rental agreement showed the division of the property, with the 2nd floor allotted to the petitioner as "67B." Despite the petitioner's detailed reply to the show cause notice, the registration was canceled without considering the explanation. The respondent, represented by the Senior Panel Counsel, confirmed the cancellation based on the door number discrepancy.

The court considered the petitioner's explanation regarding the door number discrepancy and found merit in the argument. It noted that the cancellation was done mechanically without considering the bona fide of the petitioner. The court emphasized the importance of obtaining an affidavit from the petitioner to verify the discrepancies. Consequently, the court decided to revoke the cancellation of the GST registration, setting aside the impugned orders. However, the restoration of registration was subject to certain conditions to ensure compliance with tax obligations.

The court directed the respondent to make changes in the GST web portal to allow the petitioner to file returns and pay dues. The petitioner was instructed to file returns for the pending period, pay tax dues, interest, and fees within a specified timeframe. Importantly, the court prohibited the use of unutilized Input Tax Credit (ITC) for these payments without approval from the competent authority. The order outlined detailed conditions for utilizing ITC and compliance requirements. Failure to comply with the conditions would result in the automatic cessation of the benefits granted under the order.

In conclusion, the writ petition was disposed of with no costs, and connected miscellaneous petitions were closed. The judgment provides a detailed analysis of the door number discrepancy issue leading to the cancellation of GST registration and the court's decision to revoke the cancellation with specific conditions to ensure compliance with tax obligations.

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