Scorp Industries & Anr. Vs Assistant Commissioner (Calcutta High Court)
The Calcutta High Court set aside the order rejecting Scorp Industries & Anr.’s application for revocation of GST registration cancellation under Section 30 of the CGST/WBGST Act. The Court noted that the registration had been cancelled after a show cause notice dated September 13, 2024, and that the petitioners subsequently applied for revocation on October 21, 2024. Although the respondents had relied upon a field visit report while cancelling the registration, the report had not been supplied to the petitioners. The Court held that, after the revocation application was filed, the petitioners should have been given an opportunity to respond to the field visit report. It therefore directed the Proper Officer to reconsider the revocation application afresh after supplying a copy of the report and, if necessary, conducting a further visit to the petitioners’ place of business. The fresh decision was directed to be taken within six weeks from communication of the order. The order dated February 21, 2025 rejecting the revocation application was consequently set aside.
Facts:
Scorp Industries & Anr. (“the Petitioner”) was issued a show cause notice dated September 13, 2024 under the WBGST/CGST Act, 2017. Since no reply was furnished to the said show cause notice, the Petitioner’s GST registration came to be cancelled vide order dated September 26, 2024.
Thereafter, the Petitioner applied for revocation of cancellation under Section 30 of the CGST/WBGST Act on October 21, 2024 before the Proper Officer. The filing of the revocation application was corroborated from GST REG-21 appearing in the writ petition.
Assistant Commissioner, State Tax, Alipore Charge & Ors. (“the Respondent”) subsequently issued a show cause notice dated November 14, 2024 proposing rejection of the revocation application. Since the Petitioner allegedly failed to respond thereto, the revocation application was rejected vide order dated February 21, 2025.
The Petitioner contended that though the Respondent had relied upon a field visit report while cancelling the GST registration, such report had never been supplied to the Petitioner, thereby depriving it of an opportunity to effectively respond. The Petitioner further submitted that it could not respond to the subsequent show cause notice as its consultant was unavailable. The Respondent contended that the allegations regarding non-supply of the field visit report were disputed.
Aggrieved by rejection of the revocation application without disclosure of the field visit report and without affording adequate opportunity of hearing, the Petitioner approached the Hon’ble Calcutta High Court by way of writ petition under Article 226 of the Constitution of India seeking setting aside of the rejection order dated February 21, 2025.
Issue:
Whether rejection of an application for revocation of cancellation of GST registration under Section 30 of the CGST/WBGST Act is sustainable when the field visit report relied upon for cancellation was not supplied to the registered person?
Held:
The Hon’ble Calcutta High Court in WPA/7971/2026 held as under:
- Observed that, notwithstanding the power conferred upon the Proper Officer under Section 29 of the CGST/WBGST Act to cancel registration, Section 30 simultaneously provides an opportunity to the registered taxpayer to seek revocation of cancellation of registration.
- Noted that, the Petitioner had admittedly filed an application for revocation of cancellation under Section 30 of the Act.
- Observed that, although the Respondent had relied upon a field visit report while passing the cancellation order, the show cause notice dated September 13, 2024 did not demonstrate that such field visit report had been furnished to the Petitioner.
- Noted that, once an application for revocation had been filed, the Respondent ought to have afforded an opportunity to the Petitioner to respond to the field visit report before deciding the revocation application.
- Held that, the Proper Officer should decide the revocation application afresh after supplying a copy of the field visit report to the Petitioner and, if necessary, by conducting a further visit at the Petitioner’s place of business.
- Directed that, a fresh decision shall be taken within six weeks from the date of communication of the order and consequently set aside the order dated February 21, 2025 rejecting the revocation application.
Our Comments:
The present judgment reinforces the procedural safeguards embedded under Sections 29 and 30 of the CGST Act and reiterates that cancellation of GST registration, though statutory in nature, cannot be sustained in breach of principles of natural justice. The Hon’ble Court specifically emphasized that once the Proper Officer relies upon a field visit report as foundational material for cancellation, such material must necessarily be supplied to the taxpayer before adverse consequences are imposed. The Court treated the revocation mechanism under Section 30 as a substantive statutory remedy and not as a mere procedural formality.
The reasoning aligns with the jurisprudence laid down by the Hon’ble Allahabad High Court in Apparent Marketing Private Limited v. State of U.P. & Ors., [WRIT TAX No. – 348 of 2021 order dated March 5, 2022], wherein the Court held he statute contemplates issuance of the notice in specified circumstances for specific grounds. Those could not be diluted or muddled or made vague by describing the assessee firm as “bogus”. In absence of any specific charge, the respondent authority could not be permitted to proceed to cancel the assessee’s registration. The Allahabad High Court observed that a taxpayer must be put to notice of the exact allegations and supporting material relied upon by the department before registration cancellation can attain finality.
Thus, the present judgment continues the broader judicial trend that procedural fairness and disclosure of relied-upon material remain indispensable in GST registration cancellation and revocation proceedings, particularly where field inspection reports form the basis of departmental action.
Relevant Provisions:
Section 29 of the CGST Act, 2017
“29. Cancellation or suspension of registration.-
(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,-
(a) the business has been discontinued, transferred fully for any reason including death of the proprietor, amalgamated with other legal entity, demerged or otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to optout of the registration voluntarily made under sub-section (3) of section 25:
Provided that during pendency of the proceedings relating to cancellation of registration filed by the registered person, the registration may be suspended for such period and in such manner as may be prescribed.
…”
Section 30 of the CGST Act, 2017
“30. Revocation of cancellation of registration.-
(1) Subject to such conditions as may be prescribed, any registered person, whose registration is cancelled by the proper officer on his own motion, may apply to such officer for revocation of cancellation of the registration in such manner, within such time and subject to such conditions and restrictions, as may be prescribed.
(2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application:
Provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard.
Provided further that such revocation of cancellation of registration shall be subject to such conditions and restrictions, as may be prescribed.”
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. Pursuant to a show cause notice dated 13th September, 2024 and the petitioners having not replied to such show cause notice the petitioners’ registration under the WBGST/CGST Act, 2017 (hereinafter referred to the said Act) was cancelled by an order dated 26th September, 2024.
2. The petitioners since thereafter in terms of Section 30 of the said Act had applied before the proper officer for revocation for the order of cancellation on 21st October, 2024. Factum of filing such revocation application would corroborate from GST REG – 02 appearing at page 75 of the writ petition.
3. Records would reveal that in furtherance to the above by a notice in writing dated 14th November, 2024 a show cause was issued as to why the application for revocation of cancellation shall not be rejected. Following the above show-cause the revocation application appears to have been rejected by order dated 21st February, 2025 for the petitioners having not replied to such notice.
4. Having heard the learned Advocates appearing for the respective parties though the parties would make allegations and counter-allegations, I am of the view that notwithstanding the statute conferring a right on proper officer in terms of Section 29 of the said Act to cancel the registration, however, at the same time, the statute under Section 30 thereof provides an opportunity to the registered tax payer to seek revocation of the cancellation of the registration. Admittedly, in this case the petitioners appear to have applied for revocation of the cancellation of registration. Though, the petitioners contend that the petitioners could not respond to the show-cause since the petitioners’ consultant was not available, the proper officer by an order dated 21st February, 2025 appears to have rejected the application for revocation of cancellation on the ground that the petitioners did not respond to the show cause notice. Mr. Kanodia, learned Advocate appearing for the petitioners would submit that although, the respondents had while passing the order of cancellation had relied on a field visit report such field visit report was never supplied to the petitioners. Mr. Mitra, learned Advocate representing the respondents, however, disputes the same.
5. Having heard the learned Advocates appearing for the respective parties and noting that the petitioners had already made an application for revocation and since in the instant case it transpires that the respondents had relied on a field visit report ordinarily, the said field visit report ought to have been disclosed at the first instance. The show cause notice dated 13th September, 2024 does not demonstrate that the aforesaid field visit report had been furnished to the petitioners. Be that as it may, noting that an application for revocation had been made I am of the view that the respondents should have at that stage afforded opportunity to the petitioner to respond to the field visit report. The same was also not done. Accordingly, I am of the view that the proper officer should decide on the application for revocation afresh by supplying the petitioners with the copy of the field visit report and, if necessary, by carrying out a further visit at the petitioners’ place of business. A decision in this regard must be taken by the respondents within a period of six weeks from the date of communication of this order. As a sequel thereto, the order dated 21st February, 2025 rejecting the petitioners’ application for revocation is set aside.
6. The writ petition is thus, disposed of.
****
(Author can be reached at [email protected])
