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Case Summary: Arhaan Ferrous And Non Ferrous Solutions Pvt. Ltd vs.
The Superintendent and Others
Case No.: W.P.No.31861/2023
Date of Order: 7th
August 2024
Court Name: High
Court of Andhra Pradesh, Amaravati
Summary of the Case:
The petitioner, Arhaan
Ferrous And Non Ferrous Solutions Pvt. Ltd, contested the cancellation of its
GST registration, which was based on allegations of issuing invoices without
the actual supply of goods or services, leading to wrongful input tax credit
claims. The court quashed the cancellation, citing the lack of reasons in the
order and the failure to consider the petitioner’s objections, deeming it a
violation of the principles of natural justice.
Facts of the Case:
·
The petitioner is a registered dealer
under the CGST Act.
·
On 14.10.2023, the petitioner was issued a
show-cause notice alleging wrongful availment of input tax credit due to the
issuance of invoices without supplying goods or services. The notice provided
seven days for a response.
·
The petitioner submitted objections on
17.10.2023. However, the Superintendent canceled the registration on 14.11.2023
without addressing these objections and without giving specific reasons in the
cancellation order.
Submission by Petitioner:
·
The petitioner argued that the
cancellation order was devoid of any reasoning and failed to consider the
objections raised on 17.10.2023.
·
The petitioner claimed that the real basis
for the cancellation was a letter from the Assistant Commissioner (ST) dated
11.10.2023, which was not disclosed to the petitioner. This letter alleged that
the petitioner was involved in evading tax by creating false invoices to claim
ineligible input tax credit.
Submission by Respondent:
· The
respondent maintained that the show-cause notice provided sufficient grounds
for initiating the cancellation process.
·
It was further argued that the reasons for
the cancellation were available on the GST portal, but due to system
restrictions, these could not be downloaded.
Findings and Decision of
the Court:
·
The court found that the cancellation
order lacked any reasoning and did not take the petitioner’s objections into
account. This constituted a clear violation of the principles of natural
justice.
·
As a result, the court set aside the
cancellation order, while allowing the respondent the liberty to take fresh
action against the petitioner if warranted by the provisions of the CGST Act.
·
The petitioner’s GST registration was
ordered to be restored immediately.
Conclusion:
The court's decision
underscores the necessity of adherence to the principles of natural justice in
administrative actions. The cancellation of the petitioner’s GST registration
was overturned due to the lack of a reasoned decision and proper consideration
of objections.
Disclaimer: All the
Information is based on the notification, circular and order issued by the
Govt. authority and judgement delivered by the court or the
authority information is strictly for educational purposes and on the
basis of our best understanding of laws & not binding on anyone.
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