Brief summary of the case
Court: IN THE HIGH COURT OF KERALA AT ERNAKULAM
Number: WP(C) NO. 28917 OF 2020
Petitioner: F.R. Trade Links
Respondent : The State Tax Officer
Date of decision: 05.08.2021
Judges: Honourable Mr.Justice A.M.Badar
- Cancelled the registration of certificate without reasons.
- And also rejected the application for revocation of cancellation of registration certificate.
Argument by Petitioner:
- Submitted all necessary documents for registration.
- No case is made out by the respondents that the registration has been obtained by the petitioner by means of fraud, willful misstatement or suppression of facts.
- Relevant case, P.Y. Mustaffa, Kanakonam Traders, Erattupetta V. Additional Sales Tax Officer, Pala & Another [(2002) 10 KTR 192], ( i.e. the matter of registration is merely regulatory in nature and no overbearing importance can be given to minor lapses in such matter.)
Argument by Respondent:
- No business was conducted at the place of principal business centre.
- The building was not having any building number or shutter and no books of accounts were placed at that place.
- The door was fully opened and some water tanks were kept and building’s structure is also damaged.
- Found that some stock was kept at the new premises near the house of the petitioner and that place was not added in the GST registration place and it was suspected to be a bogus.
- The business in the name and style of ‘F.R Trade Links’ was not found functioning in the given address and the impugned action was taken.
- As per verification report under section 25, it was found that the business place is an open space in pillars, having no partition walls or shutter. No building number is seen affixed by the local authority and no stock in the business premises. There is only a banner with phone number & GSTIN in the wall of three storied building.
Observations by Court:
- Reasons stated in the impugned orders are not in consonance with the powers conferred by the respondents for cancellation of registration.
- Court examined that the reasons stated in the show cause notice, which is reproduced in the foregoing paragraph, can’t be construed as reason for cancellation of registration as per provisions of Sub Section (2) of Section 29 of the CGST Act, 2017.
- “As per the intelligence squad report your business place is situated in the first floor of the three storied building which is partially completed with structure only and no building number affixed by the local authority”
- The proper officer ought to have independently assessed the situation, particularly, when the petitioner had produced the receipt of the building tax from the local authority to prove the authenticity of his stand.
- The writ petition is allowed. The respondents are directed to restore the registration of the petitioner since no reason is mentioned for cancellation of registration and revocation.
- The order of rejection of application for revocation of cancellation is also illegal and cannot stand in the scrutiny of law.