Fake invoice scheme leads to GST registration cancellation upheld despite business closure claims

Kerala HC dismissed a writ petition challenging GST registration cancellation. The petitioner had ceased business operations at the registered premises and issued fake invoices without actual goods supply. The original authority found that business details provided during VAT to GST migration were false, as the premises were leased to another party after May 2017. The appellate authority's findings were upheld, with the court noting petitioner could apply for fresh registration if intending to restart business.

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Issues:
Challenge to cancellation of GST registration under CGST/SGST Acts based on cessation of business and issuance of fake invoices.

Analysis:
The petitioner challenged the cancellation of their GST registration under the CGST/SGST Acts in the High Court. The petitioner's registration was canceled due to allegations of not conducting business from the declared place and issuing invoices without actual supply of goods. The petitioner explained that business operations had temporarily ceased due to financial difficulties and no invoices were issued post cessation. The original authority found the explanation unsatisfactory, leading to cancellation. The petitioner's writ petition against the cancellation was dismissed by the Single Judge and the Division Bench permitted the petitioner to appeal. The Appellate Authority, in Ext.P7 order, dismissed the appeal after detailed consideration.

The petitioner contended that they were conducting business until October 2022 at the mentioned premises and had not issued fake invoices. The Government Pleader argued that the petitioner failed to justify restoration of registration and could reapply for registration if needed. The Court noted that the petitioner's contentions were previously considered by the Single Judge and the Appellate Authority following the Division Bench's directions. It was found that the petitioner was not conducting business at the registered premises as claimed. The landlord confirmed no business activity post-May 2017, leasing the premises to another party unrelated to the petitioner. The Court upheld the findings of the Appellate Authority, which scrutinized various documents presented by the petitioner to establish business existence, concluding that the registration was obtained through fraud or misstatement.

The Court held that there was no basis to interfere with the impugned orders. It was emphasized that the petitioner could reapply for registration if they intended to resume business activities. The Court dismissed the writ petition, finding no grounds for intervention under Article 226 of the Constitution of India. The judgment upheld the cancellation of the petitioner's GST registration under the CGST/SGST Acts.

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