Bimal Kothari vs. Assistant Commissioner (Dsgst) & Ors

Held

The Court held that the impugned order cancelling the petitioner's GST registration could not be sustained. The reasoning was based on the non-compliance with Rule 25 of the Central Goods and Services Tax Rules, 2017. Specifically, the Court noted that the physical verification of the petitioner's business premises was carried out without issuing notice to the petitioner for his presence, which is a mandatory requirement under Rule 25. Furthermore, the verification report, although generated, was not uploaded in FORM GST REG-30 on the common portal within the prescribed 15-day period. The Court found this issue to be covered by its previous judgments in Micro Focus Software Solutions India Pvt. Ltd. and Curil Tradex Pvt. Ltd. Consequently, the Court ordered the restoration of the petitioner's GST registration and granted a leeway of eight weeks for the petitioner to upload returns for the period during which the registration stood cancelled. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Bimal Kothari, filed a writ petition challenging an order dated December 17, 2018, passed by the Assistant Commissioner (DSGST), which cancelled his GST registration. The cancellation was based on the petitioner not being found at the registered address. The petitioner contended that he had filed an application in June 2018 to change his principal place of business and had also submitted a reply on December 7, 2018, to the show cause notice dated December 4, 2018, indicating the relocation. The revenue argued that the application for amendment was not considered as it lacked a reference number, and the reply dated December 7, 2018, was not uploaded on the portal. The Court noted that the counter-affidavit was silent on whether Rule 25 of the Central Goods and Services Tax Rules, 2017, regarding physical verification, was followed.

Key Issues

1. Whether the cancellation of the petitioner's GST registration is sustainable in light of the alleged non-compliance with the procedure prescribed under Rule 25 of the Central Goods and Services Tax Rules, 2017, specifically concerning physical verification of business premises? The petitioner argued that the cancellation was erroneous because the physical verification, which led to the cancellation, was not conducted in his presence as mandated by Rule 25, nor was the verification report uploaded in FORM GST REG-30 on the common portal within the stipulated period. The petitioner relied on this Court's judgments in Micro Focus Software Solutions India Pvt. Ltd. v. Union of India & Anr. and Curil Tradex Pvt. Ltd. v. The Commissioner, Delhi Goods And Service Tax & Anr. The revenue, through its counsel, conceded that the counter-affidavit was silent on the adherence to Rule 25. The revenue's primary contention regarding the non-consideration of the amendment application and the reply was that they lacked proper reference numbers or were not uploaded on the portal, thus preventing the authority from considering them.