Case Law Details
Shreeji Rubtech Pvt. Ltd. Vs Union of India & Ors. (Gujarat High Court)
In the case of Shreeji Rubtech Pvt. Ltd. vs. Union of India & Ors., the Gujarat High Court addressed the cancellation of GST registration by the respondent authorities. The petitioner, a private company operating in Gujarat, obtained GST registration on May 4, 2023. However, the registration was canceled on June 26, 2023, following a show-cause notice alleging non-compliance with GST provisions. The petitioner sought revocation of the cancellation but faced rejection from both the adjudicating and appellate authorities, citing reasons such as the absence of business activities at the principal place of business and discrepancies in documentation.
The petitioner contended that the show-cause notice and cancellation orders were cryptic and lacked specific reasons. Referring to the Gujarat High Court’s judgment in Aggarwal Dyeing & Printing Works vs. State of Gujarat, the petitioner argued for remanding the matter for fresh consideration. The court noted that the show-cause notice and subsequent orders did not include sufficient reasoning or detailed findings. Consequently, the High Court quashed both the notice and the cancellation order and directed the respondent authorities to reexamine the case within 12 weeks. During this period, the GST registration would remain suspended until a new order is issued after granting the petitioner an opportunity to present its case.
Mr. Apurva N. Mehta appeared for the Petitioner(s) No. 1.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. Apurva N Mehta for the petitioner and learned advocate Mr. C B Gupta for the respondents nos. 1 to 3.
2. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for the following reliefs:
“(B) Your Lordships may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate Writ, Order or Direction quashing and setting aside the impugned Order dated 30.10.2023 passed by the learned Respondent no.4 [Annexure- H] and thereby restore the registration of the petitioner Company w.e.f 04.05.2023.
(C) Your Lorships may be pleased to issue a Writ of Mandamus or Writ in the nature of Mandamus or any other appropriate Writ, Order of Mandamus or any other appropriate Writ, Order or Direction and direct the learned respondents to revoke the cancellation of petitioner’s GST Registration and thereby restore the same w.e.f 04.05.2023.”
3. The brief facts of the case are that the petitioner is a private Ltd. Company incorporated on 28.02.2023 at Mumbai and is also carrying on business in the State of Gujarat. The petitioner-Company has applied for GST registration under the provisions of the Central/ Gujarat Goods and Services Tax Act, 2017 (for short ‘GST Act’) and was granted registration No.24ABKCS2891K1ZU w.e.f 04.05.2023.
3.1 The application for grant of registration was made on 12.04.2023 by the petitioner. It appears that after granting registration to the petitioner Company, notice dated 24.04.2023 was issued seeking additional information and details relating to the application for registration which was replied by the petitioner on 29.04.2023.
3.2 The respondent-authority issued a show-cause notice dated 08.06.2023 on the GST portal stating the reason “Non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed ” and called upon the petitioner to appear on 14.06.2023. It appears that the petitioner did not file any reply and accordingly, the respondent-authority cancelled the registration vide order dated 26.06.2023.
3.3 The petitioner-Company therefore applied for revocation of cancellation of the registration by application dated 28.06.2023. The respondent-authority issued the show-cause notice dated 18.08.2023 calling upon the petitioner as to showcause why the application for revocation should not be rejected as no business activity was carried out at the principal place of business. The petitioner was also called upon to supply showcause as to how the petitioner firm is operating from warehouse/godown situated at Survey no. 49-50, Jamnagar warehouse, R.K Co.Op Warehouse Soc Ltd, NH No. 8, Aslali, Ahmedabad instead of the principal place of business. The petitioner was also asked to showcase as to why no person was found during the verification on 03.08.2023 by the Jurisdictional Officers to the effect that no business/ trade related documents were found at the premise.
3.4 The petitioner filed a detailed reply to the show-cause notice on 28.08.2023, however, the respondent-authority had rejected the application for revocation of cancellation of registration.
4. Being aggrieved, the petitioner preferred an appeal before the Appellate Authority challenging the order dated 01.09.2023, rejecting the application for revocation of cancellation of the registration. The Appellate Authority rejected the appeal by order dated 30.10.2023 reiterating the reasons assigned by the adjudicating authority.
5. Learned advocate Mr. Apurva Mehta submitted that the impugned show-cause notice as well as the order for cancellation of registration are cryptic and without any reason. It was therefore submitted that without entering into the merits of the case, the matter may be remanded back relying upon the judgment of this Court in the case of Aggarwal Dyeing & Printing Works Vs. State of Gujarat reported in (2022) 137 Taxmann.com 332( Guj).
6. On the other hand, learned advocate Mr. CB Gupta for the respondents referred to the affidavit-in-reply filed by the respondents nos. 1 to 4 on merits for passing the Order in Original, rejecting the application for revocation of cancellation of registration confirmed by the Appellate Authority, but could not controvert the fact with regard to the impugned show-cause notice dated 08.06.2023 and the order of cancellation of registration dated 26.06.2023, which do not contain any reason.
7. In view of the above, relying upon the decision of this Court in the case of Aggarwal Dyeing(supra) both the show-cause notice and the order of cancellation are liable to be quashed and set aside. Therefore, the matter is remanded back to the respondent-authority for deciding the same afresh. It is further made clear that such exercise shall be completed within a period of 12 weeks. It is also made clear that the registration shall remain suspended till the respondent-authority decides the show-cause notice for cancellation after giving an opportunity of hearing to the petitioner and considering the reply of the petitioner by passing a fresh denovo detailed order.
8. With the aforesaid directions, the present petition stands disposed of. Notice is discharged.
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