Cancellation of GST registration based on direction of authorities of other statute is unsustainable

By POONAM GANDHI Goods and Services Tax Judiciary October 23, 2023

TaxGuru Citation: 2023 taxguru.in 6764
Case Name: Vidya Coal Depot Vs Additional Commissioner Grade (Allahabad High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Allahabad High Court

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Vidya Coal Depot Vs Additional Commissioner Grade (Allahabad High Court)

Allahabad High Court held that cancellation of GST registration based on direction of TTZ authorities constituted by Ministry of Environment and Forest, Government of India unjustifiable. Cancellation of GST registration has to be in accordance with section 29 read with rule 21 of GST Rules and no aid can be taken by any other statute.

Facts- Smt. Vidya Devi is the proprietor of the petitioner firm carrying the business of purchase and sale of coal on retail basis for which the GSTIN was granted. Since the petitioner’s turnover was below Rs. 50 lacs, it opted for compounding scheme u/s. 9(1) of U.P.G.S.T Act as provided u/s. 10 of the said Act.

On 24.09.2022, a show cause notice was issued by the respondent no.2 to the petitioner proposing to cancel the registration of the petitioner for the reason assigned therein with the direction of the TTZ authority and written direction by JC (SIB) B Agra for cancellation of registration of all coal depot.

Being dissatisfied with the reply of the petitioner, the registration of the petitioner was cancelled vide impugned order dated 14.10.2022 with effect from 18.8.2022. Feeling aggrieved by the aforesaid order, the petitioner preferred an appeal, but the same has also been rejected by order dated 1.12.2022. Hence the present petition.

Conclusion- Any direction given by the TTZ Authorities for cancellation of registration has to be in accordance with Section 29 read with rule 21 of GST Act and Rules therein. The GST authorities cannot blindly follow said direction of TTZ Authorities.

The Hon’ble Apex Court in the case of Ind-Swift Laboratories Limited (supra) has categorically held that a taxing statute must be interpreted in the light of what is clearly expressed therein meaning thereby when Section 29 read with rule 21 specifically provides a complete mechanism statute under which the registration can be cancelled and no aid can be taken by any other statute.