GST Vidhi | GST Case Law

Case Summary: M/s. Professional Car Decors vs. The Superintendent of CGST & C.Ex., Range IV, T.Nagar Division

Case No.: W.P. No. 26367 of 2024 & W.M.P. Nos. 28822 & 28823 of 2024

Date of Order: 12th September 2024

Court: High Court of Judicature at Madras

Judge: Hon'ble Mr. Justice Krishnan Ramasamy

Summary of the Case: M/s. Professional Car Decors, a GST-registered entity, filed a writ petition challenging the cancellation of their GST registration due to discrepancies in the door number of their place of business. The court set aside the cancellation and directed the restoration of GST registration, subject to conditions.

Facts of the Case:

1.     The petitioner, M/s. Professional Car Decors, operates a business in Chennai with GSTIN 33CKHPD6521L1Z8.

2.     Due to discrepancies in the door number of the petitioner’s business premises in the GST portal and property tax documents, the respondent issued a show cause notice on 25th June 2024, which was responded to by the petitioner on 3rd July 2024.

3.     Despite the petitioner’s response, their GST registration was canceled on 3rd July 2024. The petitioner then applied for the revocation of the cancellation, but their application was rejected on 16th August 2024.

4.     The petitioner explained that their premises had two floors, with the first floor assigned as Door No. 67A and the second floor, occupied by the petitioner, as Door No. 67B. This internal division caused the discrepancy in the documents, and the petitioner sought relief by requesting the revocation of the GST cancellation.

Submissions by the Petitioner:

1.     The petitioner submitted that the door number discrepancy was a result of an internal division of the building. While the property tax document listed the premises as Door No. 67, the GST portal mentioned it as 67B, which is the second floor where the petitioner operates.

2.     The petitioner argued that the respondent should have accepted their explanation and obtained an affidavit to resolve the issue rather than canceling the GST registration.

Submissions by the Respondent:

·        The respondent's counsel stated that the petitioner's GST registration was canceled due to discrepancies in the business address as reflected in the GST portal and property tax documents. The cancellation order was confirmed on 16th August 2024.

Findings and Judgment:

1.     The court observed that the discrepancy in the door number was adequately explained by the petitioner, who provided details about the internal division of the building.

2.     The court criticized the respondent for mechanically canceling the GST registration without considering the bona fide explanation provided by the petitioner. The court noted that such actions could affect the revenue of the department.

3.     In light of the petitioner’s explanation, the court revoked the cancellation order dated 3rd July 2024 and set aside the rejection of the revocation application dated 16th August 2024. The GST registration was directed to be restored, subject to the following conditions:

4.     The respondent was instructed to make necessary changes in the GST portal within four weeks.

5.     The petitioner was required to file all pending returns and pay tax dues, interest, and fees within four weeks of the restoration of the GST registration.

6.     The petitioner could not use unclaimed or unutilized Input Tax Credit (ITC) until it was scrutinized and approved by the department.

7.     Approved ITC would only be allowed for future tax liabilities.

8.     If any conditions were violated, the court's order would cease to operate.

Conclusion: The court set aside the cancellation of GST registration and allowed the restoration of the petitioner’s GST registration, subject to conditions regarding the filing of returns, payment of dues, and scrutiny of ITC.

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