M S Abhishek Appliance PVT LTD vs. Assistant Commissioner CGST-Delhi North Commissionerate & Ors.

Facts

The petitioner, M S Abhishek Appliance Pvt Ltd, filed a writ petition challenging an order dated 20.08.2024 that cancelled its GST registration retrospectively from 02.07.2017. The cancellation was based on the finding that the petitioner received inward supplies at its principal place of business, which was found to be non-existent during an inspection on 12.01.2024. The revenue also noted that the petitioner had received substantial input tax credit (₹7,55,69,643/-), with a significant portion (₹6,59,05,572/-) from cancelled firms. The petitioner contended that it had an additional place of business and was reconstructing its principal place of business, and that e-way bills correctly indicated goods were transported to a warehouse, not the principal place of business.

Held

The High Court held that the present writ petition was not the appropriate forum to entertain the petitioner's challenge. The Court noted that the petitioner had an equally efficacious remedy of appeal before the Appellate Authority. The Court explicitly stated that the question of whether the reasons stated in the impugned order were erroneous could be examined by the Appellate Authority. Therefore, the Court did not delve into the merits of the petitioner's contentions regarding the existence of its place of business or the interpretation of e-way bills. The Court reserved all rights and contentions of the parties. The operative direction was to dispose of the petition, with a clarification that if the petitioner files an appeal within two weeks, the Appellate Authority should consider it expeditiously, preferably within two weeks thereafter.

Key Issues

1. Whether the cancellation of the petitioner's GST registration with retrospective effect from 02.07.2017 is valid, considering the petitioner's contentions regarding its place of business and the destination of inward supplies? Petitioner's arguments: The petitioner argued that it had an additional place of business and was carrying on its business from there while its principal place of business was under reconstruction. Furthermore, the e-way bills accurately reflected that goods were transported to a warehouse, not the principal place of business, thus invalidating the revenue's primary reason for cancellation. Revenue's arguments: The revenue's position, as reflected in the impugned order, was that the petitioner's principal place of business was non-existent during an inspection, and that inward supplies were received there. The revenue also highlighted the receipt of significant input tax credit from cancelled firms.