2024 (11) TMI 1329 - HC - GST

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

M/s. Steel India, Versus The State Tax Officer Thrissur, State Of Kerala, The Joint Commissioner (Appeals), State Goods & Services Tax Department Thrissur.

Kerala HC dismissed a writ petition challenging GST registration cancellation. The petitioner had ceased business operations at the registered premises ... Cancellation of GST registration of the petitioner - petitioner had stopped business at the place mentioned in the certificate of registration - issuance of certain fake invoices without actual supply of goods - HELD THAT:- The petitioner has not made out any case for interference with the impugned orders. A perusal of Ext.P4 order of the original authority will show that the contentions taken by the petitioner had been considered by the original authority, and there was a specific finding that the petitioner was not conducting business in the premises mentioned in the certificate of registration. It is also seen from Ext.P4 that, according to the statement recorded from the landlord of the petitioner, the premises in question were leased out to the petitioner for conducting iron and steel business from 2012 to May 2017, and thereafter no business had been conducted by the petitioner in the said premises. It is also seen that the premises were thereafter leased out by the landlord to another person, who had no relation whatsoever with the petitioner. The original authority therefore recorded that it is evident that the details provided at the time of migration from the registration under the VAT to GST were false and the registration of the petitioner is therefore liable to be cancelled. There is nothing on record to indicate that any of the findings recorded by the Appellate Authority are wrong and require interference at the hands of this Court under Article 226 of the Constitution of India. That apart, as rightly pointed out by the learned Government Pleader, if the petitioner intends to restart the business, it will always be open to the petitioner to apply for fresh registration after complying with formalities. There are no reason to entertain this writ petition - petition dismissed. 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.