Orissa HC Rules GST Registration Cannot Be Cancelled

GST Registration Cannot Be Cancelled Without Proper Evidence Verification

Orissa HC, GST Judgements

The Hon’ble Orissa High Court in M/s. Jay Jagannath Filling Station v. Commissioner of Sales Tax (CT & GST) [W.P. (C) No. 9856 of 2025, dated April 29, 2025] ruled that the GST Registration Cancellation Order was invalid. The Court found that the documents submitted by the Assessee showed they were actively conducting business at the declared location. As a result, the Court remanded the case back to the Assessing Officer for reconsideration.

Facts of the Case

M/s. Jay Jagannath Filling Station (the Petitioner) challenged the Assessment Order issued by the State Tax Officer (the Respondent), which had cancelled their GST Registration. The cancellation was based on the claim that the business was not operating at the declared place.

The Petitioner submitted an affidavit with invoices from Indian Oil Corporation and photographs showing ongoing business activities. They argued that the Respondent visited the premises after cancellation and found the business still operating. However, the Respondent maintained that the cancellation occurred because the business was not functioning at the declared location.

Legal Issue

The central issue was whether the GST registration could be cancelled without proper verification of the supporting evidence.

Court’s Holding

The Hon’ble Orissa High Court ruled as follows:

The Petitioner’s documents demonstrated that the business was indeed operating at the declared place.
The Respondent did not dispute this evidence.
The case should be sent back to the Assessing Officer for further review, including an inspection of the premises to verify business operations.
The Respondent was instructed to reconsider the decision, taking the new evidence into account. Additionally, the Petitioner was ordered to appear before the Respondent with their documents for a hearing.

Legal Framework and Commentary

Under Section 29 of the Central Goods and Services Tax Act, 2017 (the CGST Act), GST registration can be cancelled if the business is found to be discontinued or not operating from the declared location. However, this decision must follow a proper verification process, adhering to principles of natural justice.

In a similar case, Olive Traders v. Commissioner [W.P.(C) 9129/2024, dated July 08, 2024], the Delhi High Court set aside the GST registration cancellation. The Court ruled that the cancellation, based solely on a postal remark of “no such firm found,” was without proper verification or hearing. It ordered the restoration of the GST registration and emphasized the necessity of an independent inquiry before cancellation.

Takeaway

This ruling reaffirms the principle that GST registrations cannot be cancelled without thorough and fair verification. Taxpayers must have the opportunity to present their evidence, and authorities must conduct a proper inspection before making any final decisions.