M/S. Manish Marble And Granites vs. Deputy State Tax Officer

Facts

The petitioner, M/s. Manish Marble and Granites, filed a writ petition challenging the order of cancellation of its GST registration dated November 17, 2023, issued by the Deputy State Tax Officer, Warangal Urban-III. This order followed a show cause notice dated June 1, 2023, to which the petitioner admittedly did not respond. The petitioner also challenged the blocking of its Input Tax Credit (ITC) of Rs. 14,44,844/- in its Electronic Credit Ledger on May 24, 2023. The petitioner had filed an application for revocation of the cancellation of registration on December 2, 2023, which was pending before the authorities. The petitioner sought setting aside of the cancellation order and show cause notice, declaration that the blocking of ITC was without jurisdiction and in violation of natural justice, and restoration of its GST registration and the blocked ITC.

Held

The Court noted that the show cause notice for cancellation of registration was issued on June 1, 2023, and the impugned order of cancellation was passed on November 17, 2023, following the petitioner's failure to respond. The reason for cancellation stated was obtaining registration by fraud, willful misstatement, or suppression of facts under Section 29(2)(e) of the Telangana Goods and Services Tax Act, 2017. The Court observed that the petitioner had filed an application for revocation of cancellation on December 2, 2023, which was pending consideration. While the statute prescribes a period of 30 days for deciding such applications, it appeared to be still pending. The Court also noted that the revocation application was not supported by sufficient material. Therefore, the Court disposed of the writ petition by directing the 1st Respondent to take an appropriate decision on the application dated December 2, 2023, in accordance with the law at the earliest. The petitioner was also permitted to furnish all relevant records and documents to establish their bona fides regarding the reasons for cancellation. The issue regarding the lack of signatures on the cancellation order and show cause notice, and the jurisdiction for blocking ITC, were not expressly decided but were implicitly deferred pending the decision on the revocation application.

Key Issues

1. Whether the order for cancellation of registration dated November 17, 2023, and the show cause notice dated June 1, 2023, issued by the 1st Respondent are legally unenforceable and contrary to Section 29(2)(e) of the CGST Act, 2017, due to the absence of manual or digital signatures. 2. Whether the act of the 2nd Respondent in blocking the Input Tax Credit of Rs. 14,44,844/- in the Electronic Credit Ledger on May 24, 2023, was without jurisdiction and in violation of the principles of natural justice. Petitioner's contentions: The petitioner argued that the cancellation order and show cause notice were not properly signed, rendering them unenforceable. They also contended that the blocking of ITC was done without jurisdiction and in violation of natural justice. The petitioner relied on the fact that their application for revocation was pending. Respondents' contentions: The respondents, through their counsel, submitted that the show cause notice was issued, and the cancellation order followed due to the petitioner's failure to respond. The reason for cancellation cited was obtaining registration by fraud, willful misstatement, or suppression of facts under Section 29(2)(e) of the Telangana Goods and Services Tax Act, 2017. The respondents noted that the petitioner's application for revocation was pending and lacked sufficient material.