Delhi HC: GST Number Can’t Cancel Based on a False Field Visit Report

The recent case of Gulab Nagar v. Assistant Commissioner [W.P No. 3383 of 2024 on March 06, 2024] before the Delhi High Court specified the consequences of incorrect field visit reports directing to the retrospective cancellation of GST registration.

This blog comprises the case details, implications, and the ruling of the court. The Hon’ble Delhi High Court disposed of the writ petition thereby maintaining that the revocation application filed by the taxpayer is not regarded in the case where the GST Registration has been cancelled by the Revenue Department based on the wrong field visit report.

Key Details

A writ petition is been filed by Gulab Nagar (“the Petitioner”) against the order dated September 01, 2023 (“the Impugned Order”) passed by the Revenue Department (“the Respondent”) in which the GST registration of the applicant has been cancelled retrospectively wef March 31, 2022, on the foundation that applicant was not operating from the address furnished to GST authorities.

Determination

The whole GST registration cancellation proceedings are established on the field visit report which is not concerned with the applicant for which the revocation application has been furnished via the applicant. Consequently, the Hon’ble High Court rendered the respondent to regard the application of revocation filed via the applicant.

Applicable Regulation

GST Section 30 of the CGST Act:

“Section 30: Revocation of cancellation of Registration

• Subject to such prerequisites as may be specified, any registered person, whose registration is cancelled by the proper officer on his motion, may apply to such officer for revocation or cancellation of the registration in a way, within such time and subject to such conditions and restrictions, as may be specified.

• The proper officer may, in such way and within such period as may be specified, by order, either revoke cancellation of the registration or reject the application:

Given that the application for revocation of cancellation of registration will not be rejected unless the petitioner has been furnished with the chance of being heard.”

Read Also: Delhi HC: GSTIN Can’t be Cancelled If Not Filed GST Returns for Some Timeframe

Closure

The ruling in Gulab Nagar v. Assistant Commissioner by the Delhi High Court acts as a safeguard against the arbitrary cancellations of GST registration established on inaccurate field visit reports. Through rendering the acknowledgement of revocation petitions and regarding the contention of the applicant of a wrong report the court determines the procedural transparency and the right to a fine hearing. For the forthcoming matters, the same judgment sets a precedent stressing the importance of due process and administrative accountability in the cases of GST.