Delhi HC: Failure to Submit the Address Change Form Can’t Be Used as a Defence for Refusing to Reinstate GSTIN

In a recent judgment, the Delhi High Court directed the Goods and Services Tax Authorities to restore the GST registration of the petitioner. The court emphasized that the taxpayer’s inability to submit the required form to update their address should not be regarded as a valid justification for withholding the reinstatement of GST registration.

The applicant, Shiv Ganga Udyog has filed the petition challenging an order that is been passed by the Appellate Authority (Commissioner of Central Tax Appeals-II, Delhi) in which the applicant’s petition against the order passed via the proper officer was dismissed.

The petitioner’s request to reverse the cancellation of their GST registration was initially declined by the proper officer and subsequently rejected via the appellate authority.

The cancellation of the petitioner’s GST registration was initiated through an order dated July 22, 2022, following a Show Cause Notice issued on June 13, 2022. The sole reason cited in the Show Cause Notice was “Discrepancies noticed during a Physical Verification.”

The petitioner was instructed to respond within 7 working days from the date of receiving the Show Cause Notice and to appear before the relevant officer on June 23, 2022. Due to the lack of clarity in the Show Cause Notice, the petitioner provided a vague response, stating that “the dealer is ready to provide information and full cooperation.”

The Proper Officer thoroughly considered this response and ultimately cancelled the petitioner’s GST registration. The basis for this cancellation was that the taxpayer’s reply was deemed unsatisfactory as it did not adequately explain why the GST registration should not be revoked.

Read Also: Cancelling GST Registration Retroactively Without a Valid Reason is Arbitrary

The primary reason for not reinstating the petitioner’s GST registration was their relocation of premises without submitting the required form. Initially, the petitioner explained that they had moved after their registration was cancelled and thus couldn’t file the necessary forms. However, this explanation was not addressed. It’s important to note that once a taxpayer’s GST registration is cancelled, they are unable to file the required forms.

After considering the facts and arguments presented, the bench composed of Justice Vibhu Bakhru and Justice Amit Mahajan concluded that the inability of the petitioner to file the necessary form to update their business location cannot be used as a justification for withholding the restoration of their GST registration.

Important: Easy to Change GST Registered Business Address on Portal

Particularly considering that this was not the initial reason the petitioner’s GST registration was revoked. The panel ruled that the various difficulties with the tax returns and tax due cannot be used as justification for cancelling the petitioner’s GST registration. In addition, it was stated that the authorities must evaluate the correct culpability in line with the law if there is any reason to suspect that the taxpayer has not fully revealed the matter.

The bench overturned the contested decisions and instructed the authorities to reinstate the GST registration of the petitioner. Furthermore, it was clarified that the respondents are not prevented from taking appropriate actions, provided they do so in conformity with the law, if they believe that the petitioner’s registration should be cancelled or other measures need to be implemented.