Case Law Details

Case Name : Kordient Ventures Pvt. Ltd. Vs Commissioner (Delhi High Court)
Appeal Number : W.P.(C) 13934/2023
Date of Judgement/Order : 20/10/2023
Related Assessment Year :

Kordient Ventures Pvt. Ltd. Vs Commissioner (Delhi High Court)

Introduction: Kordient Ventures Pvt. Ltd. recently faced a setback as the GST department refused to update its current place of business. This led to the cancellation of its GST registration, prompting the company to approach the Delhi High Court. The court, in a recent order, directed the filing of a revocation application for GST cancellation.

Detailed Analysis:

1. Impugned Order and Show Cause Notice:

  • The petitioner contested an order dated 12.12.2022 canceling its GST registration, challenging a Show Cause Notice issued on 09.09.2022.
  • The SCN cited non-functioning/existence at the principal place of business as grounds for registration cancellation.

2. Change of Place of Business:

  • The petitioner asserted a legitimate change in its place of business, having applied for the update on 23.10.2020.
  • A Show Cause Notice on 02.11.2020 raised concerns, leading to the rejection of the application on 11.11.2020 without providing reasons.

3. Field Visit Discrepancy:

  • The SCN was issued before a field visit on 06.12.2022, revealing that the petitioner’s Manager was present, but the business was allegedly non-functional at the principal place.

4. Cancellation Grounds and Unreasoned Order:

  • The petitioner’s GST registration cancellation resulted from the inability to update records reflecting the current place of business.
  • An order on 11.11.2020, rejecting the application, lacked reasoning and was deemed unsustainable.

5. Delhi HC Decision and Directions:

  • The Delhi High Court disposed of the petition, allowing the petitioner to file a revocation application within two weeks.
  • The Proper Officer is instructed to consider the application and alter records to amend the current place of business within one week, disregarding the prior unreasoned order.

Conclusion: In a significant development, the Delhi High Court’s directive allows Kordient Ventures Pvt. Ltd. to contest the cancellation of its GST registration. The court emphasized the petitioner’s right to update business details and directed the filing of a revocation application. The decision underscores the importance of a fair and reasoned approach by the GST department in handling such matters, providing relief to businesses facing challenges in updating their registration information.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. The petitioner has filed the present petition, inter alia, impugning an order dated 12.12.2022 (hereafter ‘the impugned order’) cancelling the petitioner’s GST registration. The petitioner also impugns a Show Cause Notice dated 09.09.2022 (hereafter ‘the SCN’), pursuant to which the impugned order was passed.

2. The petitioner was issued the SCN proposing to cancel the petitioner’s GST registration for the reason that it was not found functioning / existing at its principal place of business. The petitioner was directed to furnish a reply to the SCN and also appear before the concerned officer at the appointed date and time, but no such date or time was specified. The petitioner’s GST registration was also suspended with effect from 09.09.2022.

3. It is the petitioner’s case that it had changed its place of business and had duly applied for the same on 23.10.2020. The said application is not on record. However, pursuant to the said application, the Proper Officer had issued a Show Cause Notice dated 02.11.2020 proposing to reject the same and stating the following reasons for doing so: “Principal Place of Business – Nature of Possession – Others (Please specify) – Document not uploaded for addition”. The petitioner was also directed to furnish a reply to the said Show Cause Notice by 10.11.2020.

4. Thereafter by an order dated 11.11.2020, the petitioner’s application for adding / amending the place of business was rejected. The said order does not disclose any reasons for the same. The space where the reasons were supposed to be set out, is left blank.

5. The learned counsel for the petitioner also points out that the SCN was issued prior to the field visit which was conducted on 06.12.2022. The report of the said field visit indicates that the petitioner’s Manager was present at the premises, but the petitioner was not functioning from the principal place of business.

6. It is apparent from the above that the petitioner’s registration has been cancelled as the respondents have not permitted the petitioner to update the records to reflect its current place of business.

7. In view of the above, we consider it apposite to dispose of the present petition by permitting the petitioner to file an application for revocation of cancellation of its GST registration, and also substantiate that it is carrying on its business from another premises. If the said application for revocation of cancellation of GST registration is filed within a period of two weeks from today alongwith the relevant documents, the Proper Officer shall consider the same and pass a speaking order within a period of one week from the said date, uninfluenced by the previous order(s).

8. The Proper Officer shall also consider the petitioner’s request for altering the records to amend its current place of business, notwithstanding the order dated 11.11.2020, as the said order being unreasoned, is clearly unsustainable.

9. The petition is disposed of in above said terms.

Download Judgment/Order

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