Jagdamba Marble, Gram Temri, Mana Camp, Raipur Chhattisgarh 492015 vs. Joint Commissioner (Appeals)

Held

The Court allowed the writ petition, setting aside the impugned order passed by the Joint Commissioner (Appeals) (Respondent No. 1) and the order dated June 26, 2023, passed by the Assistant Commissioner (Respondent No. 2). The Court found that Respondent No. 1 had travelled beyond the scope of the show-cause notice by relying on the "red alert notice" for dismissing the appeal, which was not mentioned in the original show-cause notice or the order cancelling the registration. This was held to be a violation of the principles of natural justice, as the petitioners were not given an opportunity to address this specific ground. The Court noted that the petitioners had intimated the change of business premises, and physical verification confirmed business operations at the new location. The reason for cancellation, i.e., the premises being found closed and non-functioning, had been rectified by intimating the new address, which was found operational. Therefore, refusing to revoke the GST registration served no fruitful purpose. The Court directed the petitioners to file GST returns for the period until the date of restoration of their GST registration within 30 days.

Facts

The petitioners, Jagdamba Marble, had their GST registration cancelled by the Assistant Commissioner (Respondent No. 2) on June 26, 2023, citing non-operation of business from the registered address. The petitioners had shifted their business to a new premises and informed the department, but failed to amend the address on the GST portal due to lack of knowledge. An appeal was filed before the Joint Commissioner (Appeals) (Respondent No. 1). While physical verification of the new premises confirmed business operations, the appeal was rejected on November 28, 2023, due to a "red alert notice" issued to the petitioners. The petitioners contend that this rejection was based on grounds not mentioned in the show-cause notice and violated principles of natural justice.

Key Issues

1. Whether the order passed by the Joint Commissioner (Appeals) (Respondent No. 1) rejecting the appeal for revocation of GST registration cancellation is bad in law and in violation of the mandate of Section 29 of the CGST Act, 2017, and principles of natural justice? 2. Whether the Joint Commissioner (Appeals) acted beyond his powers by relying on a "red alert notice" which was not part of the show-cause notice or the order cancelling the registration? Petitioner's Arguments: The petitioners argued that Respondent No. 1 erred in passing the impugned order as it contravened Section 29 of the CGST Act, 2017. They contended that the cancellation was based on the business not being found at the old address, but they had shifted and the new premises were operational, as confirmed by physical verification. The reliance on the "red alert notice" was impermissible as it was not mentioned in the show-cause notice, violating principles of natural justice and the rulings in Commissioner of Central Excise, Bhubaneswar -I vs. Chambdany Industries Ltd. and Precision Rubber Industries Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai. They also argued that the rejection impacted their fundamental rights under Article 19(1)(g) and Article 21 of the Constitution. The petitioners are willing to pay taxes but are unable to file returns due to the cancellation. Revenue's Arguments: The learned State Counsel opposed the petitioners' submissions, but the specific arguments made by the revenue are not detailed in the provided excerpt.