Scorp Industries And Anr. vs. Assistant Commission Er, State Tax, Alipore Charge And Ors.
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The petitioners, Scorp Industries & Anr., had their GST registration cancelled by the Assistant Commissioner, State Tax, Alipore Charge & Ors. on September 26, 2024, following a show cause notice dated September 13, 2024, to which they did not reply. Subsequently, the petitioners applied for revocation of this cancellation on October 21, 2024, under Section 30 of the Act. A show cause notice dated November 14, 2024, was then issued regarding the rejection of the revocation application. The application for revocation was ultimately rejected by an order dated February 21, 2025, again due to the petitioners' failure to reply to the show cause notice. The petitioners contended that a field visit report relied upon for the initial cancellation was never supplied to them.
Held
The Court held that while the statute confers power to cancel registration, it also provides an opportunity for revocation under Section 30. The Court noted that the petitioners had applied for revocation. It found that the respondents relied on a field visit report, which ordinarily ought to have been disclosed. The Court observed that the show cause notice for revocation did not indicate that this report was furnished. Furthermore, the Court noted that the respondents did not afford the petitioners an opportunity to respond to the field visit report at the stage of considering the revocation application. Consequently, the Court set aside the order dated February 21, 2025, and directed the proper officer to decide the revocation application afresh. This decision is to be made after supplying the petitioners with a copy of the field visit report and, if necessary, conducting a further visit to the petitioners' place of business. The respondents are to decide this within six weeks of the order's communication. The ratio decidendi is that a taxpayer must be provided with all relevant documents, including field visit reports, to enable them to effectively respond to show cause notices, particularly when seeking revocation of a cancelled registration, to ensure principles of natural justice are upheld.
Key Issues
1. Whether the order dated February 21, 2025, rejecting the petitioners' application for revocation of GST registration cancellation is sustainable in law, considering the alleged non-supply of the field visit report and the petitioners' inability to respond to the show cause notice due to consultant unavailability? (Mixed question of law and fact, turning on principles of natural justice and the interpretation of Section 30 of the WBGST/CGST Act, 2017). Petitioner's arguments: The petitioners argued that the field visit report, which formed the basis for the initial cancellation order, was never provided to them. They also contended that their failure to respond to the show cause notice concerning the revocation application was due to their consultant's unavailability. They relied on the principle that relevant documents should be disclosed to allow for a proper response. Revenue's arguments: The learned Advocate representing the respondents disputed the petitioners' claim that the field visit report was not supplied.
Sections Cited
Section 30, Section 29
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2026
DL-11 Ct. No. 03 Srimanta
In the High Court at Calcutta Constitutional Writ Juri iction Appellate Side
WPA/7971/2026
Scorp Industries & Anr. -Vs.- Assistant Commissioner, State Tax, Alipore Charge & Ors.
Mr. Ankit Kanodia, Ms. Megha Agarwal, Mr. Piyush Khaitan, Ms. Tulika Roy, Mr. S. Ojha …for the petitioners. Mr. Santanu Kumar Mitra, Mr. Subhadip Biswas …for the State.
Pursuant to a show cause notice dated 13th September, 2024 and the petitioners having not replied to such show cause notice the petitioners' registration under the WBGST/CGST Act, 2017 (hereinafter referred to the said Act) was cancelled by an order dated 26th September, 2024. 2. The petitioners since thereafter in terms of Section 30 of the said Act had applied before the proper officer for revocation for the order of cancellation on 21st October, 2024. Factum of WPA/7971/2026 2 filing such revocation application would corroborate from GST REG – 02 appearing at page 75 of the writ petition.
Records would reveal that in furtherance to the above by a notice in writing dated 14th November, 2024 a show cause was issued as to why the application for revocation of cancellation shall not be rejected. Following the above show-cause the revocation application appears to have been rejected by order dated 21st February, 2025 for the petitioners having not replied to such notice.
Having heard the learned Advocates appearing for the respective parties though the parties would make allegations and counter-allegations, I am of the view that notwithstanding the statute conferring a right on proper officer in terms of Section 29 of the said Act to cancel the registration, however, at the same time, the statute under Section 30 thereof provides an opportunity to the registered tax payer to seek revocation of the cancellation of the registration. Admittedly, in this case the petitioners appear to have applied for revocation of the cancellation of registration. Though, the petitioners contend that the petitioners could
WPA/7971/2026 3 not respond to the show-cause since the petitioners’ consultant was not available, the proper officer by an order dated 21st February, 2025 appears to have rejected the application for revocation of cancellation on the ground that the petitioners did not respond to the show cause notice. Mr. Kanodia, learned Advocate appearing for the petitioners would submit that although, the respondents had while passing the order of cancellation had relied on a field visit report such field visit report was never supplied to the petitioners. Mr. Mitra, learned Advocate representing the respondents, however, disputes the same.
Having heard the learned Advocates appearing for the respective parties and noting that the petitioners had already made an application for revocation and since in the instant case it transpires that the respondents had relied on a field visit report ordinarily, the said field visit report ought to have been disclosed at the first instance. The show cause notice dated 13th September, 2024 does not demonstrate that the aforesaid field visit report had been furnished to the petitioners. Be that as it may, noting that an application for revocation had been made I
WPA/7971/2026 4 am of the view that the respondents should have at that stage afforded opportunity to the petitioner to respond to the field visit report. The same was also not done. Accordingly, I am of the view that the proper officer should decide on the application for revocation afresh by supplying the petitioners with the copy of the field visit report and, if necessary, by carrying out a further visit at the petitioners’ place of business. A decision in this regard must be taken by the respondents within a period of six weeks from the date of communication of this order. As a sequel thereto, the order dated 21st February, 2025 rejecting the petitioners’ application for revocation is set aside.
The writ petition is thus, disposed of.
(Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.