Delhi HC Directs to Restore GST Registration Due to Petitioner’s Incapacity to Update Address

In a recent ruling by the Delhi High Court, Roxy Enterprises raised concerns over the cancellation of its Goods and Services Tax (GST) registration. The court instructed the restoration of the GST registration after conducting a physical verification process, considering the petitioner’s inability to immediately update their address.

Delhi High Court Order for Roxy Enterprises

Roxy Enterprises had its GST registration cancelled through an order passed on 14th February 2023. As per the issued order, the taxpayer was deemed non-existent by the Deputy Commissioner, Anti Evasion, CGST Delhi North, leading to the cancellation under Section 29(2) of the CGST Act, 2017, in conjunction with Rule 21 of the CGST Rules, 2017.

The petitioner challenged the GST registration cancellation filing a writ petition, and on 22nd May 2023, the court set aside the cancellation order. The court remanded the matter to the relevant officer for reconsideration, granting the petitioner an opportunity to be heard.

Subsequently, on 6th June 2023, the GST registration was cancelled by the proper officer following a physical verification, citing that the petitioner was not conducting business from the declared principal place of business.

The petitioner then filed an appeal and, during the appeal’s pendency, approached the court with another writ petition (W.P.(C) No.11677/2023), contesting the arbitrariness of Rule 23(3) of the Central Goods & Service Tax Rules, 2017.

However, during the hearing, the petitioner did not pursue the challenge to the rule and instead requested an expedited resolution of the appeal. On September 4, 2023, the court concluded the writ petition and instructed the Appellate Authority to promptly resolve the appeal within four weeks.

Problems and Explanation Presented By Petitioner

The main issues revolved around the cancellation of GST registration on the grounds of the petitioner’s alleged non-existence at the declared principal place of business. The petitioner argued that it had relocated its business premises but faced procedural obstacles that hindered the prompt update of the address.

High Court Inspection and Ruling

The court acknowledged that a physical examination occurred on 06.06.2023, during which the petitioner communicated the address change to the visiting team. However, the respondents contested this claim, and no decisive evidence was provided on the record.

Important: GSTIN Cancellation Process Will be Applied If Not Filed GSTR-3B for a Continuous 6 Months

Given the circumstances, the court directed the relevant official to visit the petitioner’s current premises within one week to verify their operation. If it is confirmed that the petitioner is indeed conducting business from the new premises, the GST registration shall be immediately restored.

Furthermore, the court directed the petitioner to file the required application for updating the current place of business.

The respondents were also instructed to verify the filing of returns and the application for record updating. It is important to note that the court’s order does not prevent the respondents from initiating proceedings if the petitioner is found to be in violation of any statutory provisions.

Conclusion

The ruling of the Delhi High Court highlights the significance of adhering to procedural requirements and allows for the restoration of GST registration following a physical verification process. This case highlights the difficulties that businesses may face when expeditiously updating information due to procedural obstacles, underscoring the importance of a just and effective resolution of such matters.