Jaibajrang Loha Private Limited vs. State Of Chhattisgarh

Facts

The petitioner, Jaibajrang Loha Private Limited, filed a writ petition challenging the rejection of its application for revocation of GST registration. Initially, a notice for cancellation of registration was issued on 21.08.2025, leading to an order of cancellation on 06.10.2025. This was challenged, and the High Court quashed the show cause notice and subsequent orders, allowing the respondent to initiate fresh proceedings in accordance with CGST Rules. Subsequently, the petitioner applied for restoration of registration on 04.02.2026, with delay condoned. A show cause notice for rejection of revocation was issued on 05.02.2026, citing a change in business place and requiring supporting documents. The petitioner filed a reply on 08.04.2026. An order dated 20.05.2025 rejected the revocation application, citing the inspector's report that the dealer passed on fake ITC and that departmental proceedings were ongoing, deeming it inappropriate to grant registration in the interest of revenue, referencing Rule 21(B).

Held

The Court held that the writ petition is not maintainable due to the availability of a statutory remedy of appeal under Section 107 of the GST Act. The Court observed that the initial notice was for violation of Rule 21(a) (not conducting business and place of business not found). However, during physical verification, new facts emerged, which were considered in the impugned order after considering the petitioner's reply and supporting documents. Therefore, the inspection report was known to the petitioner at the time of the order, and no case was made out for entertaining the writ petition while ignoring the statutory appeal provision. The petitioner was relegated to file a statutory appeal. The Court further directed that if the appeal is filed within 30 days of receiving the order, the appellate authority and GST department shall not raise the plea of limitation, and the appeal should be decided expeditiously on merits, acknowledging the adverse impact of GST registration cancellation on the petitioner's business.

Key Issues

1. Whether the impugned order rejecting the application for revocation of GST registration is liable to be quashed for being passed in violation of the principles of natural justice and considering irrelevant material? The petitioner argued that the authority considered irrelevant material not subject to the inquiry and passed the order in violation of natural justice. 2. Whether the writ petition is maintainable given the availability of an alternative statutory remedy? The State contended that the petitioner has an efficacious remedy of appeal under Section 107 of the GST Act, where all issues, including violation of law and non-consideration of documents, can be raised. The State argued for the dismissal of the writ petition.