Flex Enterprises Vs Superintendent of Central Tax (Karnataka High Court)
The petitioners challenged orders cancelling their GST registrations under Section 29 of the Central Goods and Services Tax Act, 2017, along with the consequential suspension of their registrations. Before passing the cancellation orders, the respondent had issued Show Cause Notices, and the petitioners had also filed applications seeking revocation of the cancellation.
The principal issue before the High Court was whether it should interfere with the cancellation orders by restoring the proceedings to the stage of the Show Cause Notices, permitting the petitioners to produce documents in support of their case, or merely direct the respondent to decide the pending revocation applications.
The petitioners contended that Rule 22(1) of the Central Goods and Services Tax Rules, 2017 mandates that the proper officer must first record “reasons to believe” that a registration is liable to be cancelled before issuing a notice in Form GST REG-17. They submitted that the respondent had purportedly conducted site inspections before issuing the notices, but the inspection reports failed to justify such belief. In one writ petition, the uploaded personal visit report contained a photograph of an unrelated property instead of the petitioner’s business premises. In the other writ petition, the uploaded inspection report was blank. The petitioners further submitted that they possessed documents establishing that business was being conducted from the registered place of business and sought an opportunity to place those documents before the authority.
