Singodwala Warehousing And Logistics PVT. LTD. vs. The State Of Bihar

Held

The Court held that the orders of cancellation of registration could not be sustained. The Court found a complete lack of detail regarding the inspection in the Show Cause Notice and the order of cancellation. Crucially, the Inspection Report was not supplied to the petitioner along with the show-cause notice. The Court also expressed inability to place reliance on the Inspection Report dated 06.07.2023, as it did not record any witnesses, stated suspicion as the reason for inspection, and showed the business premises as closed with photographs, but without date and time. Similarly, the Panchnama dated 22.09.2023, conducted after revocation, was also not relied upon as the business could not have resumed without registration being restored. The Panchnama was also noted as unsigned by the officer and lacked details of the 'Panchas'. The Court noted the Government's Circular No. 3 of 2023, which allowed for the resumption of cancelled registrations upon payment of up-to-date dues. The petitioner stated they had paid up-to-date dues, or would pay within one month. The Court directed that upon payment of up-to-date dues, the petitioner's registration shall stand restored. The petitioner was directed to appear before the Assessing Officer on 20.12.2024 with proof of payment. If dues were still payable and the petitioner wished to appeal the assessment order, an undertaking to that effect would lead to registration restoration upon payment of 10% of the total amounts.

Facts

The petitioner, Singodwala Warehousing and Logistics Pvt. Ltd., is challenging the cancellation of its GST registration. A show-cause notice dated 09.07.2023 was issued for cancellation due to the business premises being found non-existent during a field verification. The registration was subsequently cancelled by an order dated 27.07.2023. An application for revocation of this cancellation was declined on 23.09.2023. The petitioner also faced assessment orders for the years 2020-21, 2021-22, and 2022-23, with demands raised. The petitioner claims to have paid all demanded amounts. Appeals against the cancellation order were also rejected. The petitioner argues that details of the inspection and the inquiry report were not provided, and relies on previous High Court judgments where similar cancellations were interfered with. The revenue, through a supplementary counter affidavit, presented details of two inspections, asserting the petitioner's business premises were found non-existent. A Panchnama dated 22.09.2023, allegedly conducted during the revocation process, also indicated the business was not functional.

Key Issues

1. Whether the cancellation of the petitioner's GST registration is sustainable in law, considering the alleged lack of details regarding the inspection in the show-cause notice and cancellation order, and the non-supply of the inquiry report to the petitioner? (Question of law and fact, concerning principles of natural justice and procedural fairness under the BGST Act). Petitioner's arguments: The petitioner contends that the show-cause notice and the final order lacked specific details of the inspection. Furthermore, the Inquiry Report was not provided to the petitioner. Reliance is placed on Annexures-P/7 and P/8, which are previous judgments of this Court where similar cancellation orders were set aside. Revenue's arguments: The revenue argues that inspections were conducted at two premises, one of which was the petitioner's business premise, where no business activity was found. A subsequent inspection during the revocation application also found the business to be non-existent, as evidenced by a Panchnama dated 22.09.2023.