M/S. Sholay Bar And Restaurant vs. The Deputy State Tax Officer Nacharam -1

Held

The Court acknowledged the facts and circumstances presented. While not explicitly ruling on the legality of the cancellation or the appeal rejection, the Court inclined to provide relief to the petitioner. It granted liberty to the petitioner to approach the competent authority within two weeks from the date of the order to submit an application for revocation of the GST registration cancellation. If the online submission was not accepted due to technical reasons, the petitioner was permitted to submit the application in physical form. The competent authority was directed to entertain the application and decide it in accordance with the law within three weeks thereafter. The Court did not expressly leave any issue undecided but disposed of the writ petition with these directions.

Facts

The petitioner, M/s Sholay Bar & Restaurant, had its GST registration cancelled by the Deputy State Tax Officer (Respondent No. 1) via an order dated 15.09.2023. The stated reason for cancellation was a violation of Rule 21(d) concerning Rule 10A (Bank details). The petitioner filed an appeal against this order, but it was rejected on 26.03.2026, citing that the appeal was filed beyond the prescribed limitation period. The petitioner contends that after a takeover of a previous entity, their accountant failed to update bank account information on the portal, leading to the cancellation. Aggrieved by the rejection of the appeal, the petitioner filed the present writ petition before the High Court.

Key Issues

1. Whether the cancellation of GST registration, based on a violation of Rule 21(d) for non-compliance with Rule 10A (Bank details), was arbitrary and in violation of principles of natural justice, considering the circumstances of a takeover and alleged failure to update information by an accountant? (Question of law and fact, turning on Section 29 of the CGST Act and Rules 21 and 10A). 2. Whether the rejection of the petitioner's appeal solely on the ground of limitation, without considering the merits of the case or the reasons for the delay, was justified? (Question of law, turning on the provisions governing appeals under the GST Act). Petitioner's arguments: The cancellation was arbitrary and a violation of natural justice. The delay in updating bank details was due to an accountant's oversight following a business takeover. The appeal was rejected on limitation without considering these circumstances. Revenue's arguments: The cancellation was due to the petitioner's failure to furnish bank account details on the portal.