2025 (3) TMI 837 - HC - GST

GST Tax Demand Upheld: Failure to Disclose Business Premise in Registration Leads to Validated Tax Assessment Under Section 74

M/s Manoj Metal, Industries Versus State of U.P. and another

M/s Manoj Metal, Industries Versus State of U.P. and another - 2025:AHC:36863 - DB 1. ISSUES PRESENTED and CONSIDEREDThe primary legal issue considered in this judgment is whether the petitioner was justified in challenging the demand raised by the Deputy Commissioner under Section 74 of the Goods and Services Tax Act, 2017, based on the alleged non-disclosure of a business premise during registration. The Court also considered whether the petitioner had an adequate opportunity to contest the demand and whether the High Court's jurisdiction under Article 226 of the Constitution of India was appropriately invoked.2. ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents:The case revolves around the provisions of the Goods and Services Tax Act, 2017, specifically Section 74, which deals with the determination of tax not paid or short paid due to fraud or willful misstatement. The petitioner was accused of not disclosing a business premise, which led to a demand for unpaid taxes.Court's interpretation and reasoning:The Court noted that the petitioner had not sought registration for the business premise located at J-29, Panki Site-3, Kanpur, despite conducting business there. The registration was only sought and granted for three other premises. The Court emphasized that the responsibility to disclose all business premises lies with the applicant at the time of registration. The mere inclusion of the premise in the Partnership Deed attached to the registration application did not suffice as a formal disclosure for GST purposes.Key evidence and findings:The evidence considered included the Partnership Deed, which mentioned all four business premises, and the show cause notice issued after the inspection by the Special Investigation Wing. The Court found that the petitioner did not formally disclose the fourth premise for GST registration, which was a crucial factor in the demand raised by the Deputy Commissioner.Application of law to facts:The Court applied the provisions of the GST Act to the facts, concluding that the petitioner failed to fulfill the statutory obligation to disclose all business premises during registration. This non-disclosure justified the demand raised under Section 74 of the Act. The Court also noted that the petitioner had not availed the alternative remedy of appeal under Section 107 of the Act.Treatment of competing arguments:The petitioner argued that the failure to include the premise in the registration was not intentional and that the authorities should have included it based on the Partnership Deed. The respondents countered that the onus was on the petitioner to disclose all premises. The Court sided with the respondents, finding the petitioner's arguments baseless and unsupported by the facts.Conclusions:The Court concluded that the petitioner had no valid grounds to challenge the demand, as the non-disclosure of the business premise was a clear violation of the GST registration requirements. The petitioner's failure to utilize the appeal process further weakened their position.3. SIGNIFICANT HOLDINGSThe Court held that the responsibility to disclose all business premises during GST registration lies solely with the applicant. The mere mention of premises in ancillary documents like a Partnership Deed does not constitute formal disclosure for GST purposes. The Court also highlighted the importance of exhausting alternative remedies, such as the appeal process, before invoking the jurisdiction of the High Court under Article 226.Preserve verbatim quotes of crucial legal reasoning:'Merely because the Partnership Deed makes reference to premises other than qua which the registration is sought, the Registering Authority is not expected to register the said premises also for the purpose of GST.'Core principles established:The judgment reinforces the principle that applicants must fully disclose all business premises when seeking GST registration. It also underscores the necessity of following statutory appeal procedures before seeking judicial intervention.Final determinations on each issue:The Court determined that the petitioner's failure to disclose the business premise justified the demand raised by the Deputy Commissioner. The petition was dismissed due to the lack of merit in the arguments presented and the failure to pursue available remedies.