TaxTMI 
TaxTMI 
2023 (10) TMI 1292
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....corporated at Chennai and obtained registration number there. The petitioner is a group company of M/s. Sakthi Ferroy Alloys (India) Private Limited (i.e., parent company) having its manufacturing plant at Vasanadu Gollapalle Village, Kuppam Mandal, Chittoor. This parent company manufactures the TMT bars and billets. The petitioner purchases TMT bars and billets from its parent company and sells to various States like Tamilnadu, Karnataka, Andhra Pradesh and Kerala. Whereas the petitioner company procures the scrap iron via imports from various countries like Europe, USA, Hongkong, Malaysia, Singapore, South Africa, West Africa etc. besides making local purchases in Chennai from M/s. Hyundai and its ancillary suppliers and the petitioner sells to various purchasers and its majority of scrap sales are made to its parent company at Kuppam. (b) The petitioner's further case is that it has obtained GST registration in A.P. to maintain proper supply chain of M/s. Sakthi Steel Industries India Private Limited. Further, to have better control and operational efficiency, the petitioner obtained on lease Ac. 2.71 cents of vacant land with built up area situated in S.No. 15/3 of Vasanadu ....
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.... carefully gone through the impugned cancellation order and the appellate order. It must be said that in both the orders respondents 1 and 2 on the main observations that the parent and group company have obtained registration in respect of same premises, the leasehold premises of the petitioner is not conducive for the type of business it has undertaken i.e., sale of TMT bars and billets, since it is the case of the petitioner that all the goods supplied to its parent company were delivered as and when the goods were received from suppliers and the finished goods which are purchased from parent company are immediately shipped to the buyers and such is the business activity of the petitioner, there is no need to take huge land to an extent of Ac. 2.71 cents when the same is not used for storing the goods, the Lease Deed dated 26.11.2022 is an unregistered document, have come to the conclusion that the petitioner obtained registration by playing fraud and involved in bill trading without actual movement of goods and genuine invoices. Accordingly, the cancelation order which was passed by the 2nd respondent was confirmed by the 1st respondent. 6. Be that as it may, Section 29(2) of ....
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....s an avowed purpose of stating the formal grounds of accusation so as to invite proper explanation or reply from the person who is accused of charges. This process is based on equitable principle of natural justice that no man should be condemned of unheard. Mere issuance of the show cause notice devoid of requisite particulars does not amount to proper compliance of the requirement. In that context, it should be mentioned that the show cause notice dated 20.03.2023 has flagrantly violated the principles of natural justice. Therefore, the very foundation for invocation of cancelation is feeble as it has no legal sanctity. 8. Be that as it may, though the show cause notice is vague, the petitioner seems to have submitted its reply dated 24.03.2023 with requisite particulars to the best of its ability. It clearly stated that to maintain proper supply chain and to have better control and operational efficiency on cost as well as convenience of operations, it applied for GST registration in A.P. by obtaining lease of part of the property owned by its parent company in Kuppam, Andhra Pradesh. The petitioner mentioned that all the TMT purchases of the petitioner are from its parent comp....
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....nded for suomoto cancelation." In view of the above and as per Field Visit Report of the Dy. Assistant Commissioner (ST-II), Palamaner Circle, Palamaner, it is a fact that there were Two Registrations for the same commodity existing in the same place of business reveals that the place of business now shown is not suited for the present business activities and hence recommended for cancellation." 10. Thus, the observations of the 2nd respondent would reveal that mainly basing on the fact that the registration of the petitioner and its parent company emanate from same premises, the 2nd respondent, without verifying the records to know whether the petitioner involved in issuing and obtaining the fake invoices and doing fake business to avoid tax, came to the conclusion that the place of business shown by the petitioner is not suited for the present business activities and hence, recommended for cancelation. We are unable to comprehend, even if the place of business of the petitioner for argument sake is not conducive for its business, how the said fact can be treated as sufficient to conclude that the petitioner obtained registration by committing fraud or wilful misstatement or ....