GST registration cancellation upheld where fake invoices and no proof of goods movement undermined the input tax credit claim.

GST registration cancellation was sustained where the assessee failed to prove actual movement of goods or genuine business activity and relied only on e-way bills and fabricated invoices for the input tax credit claim. The authorities found no reliable transport, freight, loading, unloading, or other supporting records, and the record also indicated use of fake documents and parallel proceedings against suppliers and for blocking ITC. In that setting, cancellation under the GST power dealing with contravention of the Act and Rules was treated as a permissible preventive measure, and the challenge failed.

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Issues: Whether cancellation of GST registration was justified on the ground that the assessee failed to establish actual movement of goods and the claim of input tax credit was supported only by e-way bills and fabricated invoices.

Analysis: The registration was cancelled after notice and opportunity of hearing when the assessee could not produce reliable evidence of physical movement of goods, such as transport documents, freight records, loading and unloading particulars, or any material showing genuine business activity commensurate with the claimed ITC. The material on record also indicated use of fabricated documents and fake invoices, and the authorities had already initiated proceedings under the relevant GST provisions against the suppliers and for blocking of ITC. In such circumstances, cancellation of registration under the statutory power governing contravention of the Act and Rules was held to be a permissible preventive measure.

Conclusion: The cancellation of GST registration was upheld and the challenge to the order failed.

Final Conclusion: The intra-court appeal did not succeed, and the order sustaining cancellation of registration remained undisturbed.

Ratio Decidendi: Where the assessee fails to prove genuine movement of goods and the ITC claim is found to rest on fabricated documents, cancellation of GST registration is sustainable as a preventive action under the GST regime.

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