Delhi High Court Permits Kordient Ventures to Challenge GST Registration Cancellation

Case Name:

Kordient Ventures Pvt. Ltd. vs. Commissioner, Delhi GST and others

Key Takeaways:

1. Kordient Ventures Pvt. Ltd. filed a petition challenging the cancellation of its GST registration.
2. The petitioner claimed to have changed its place of business and had applied for the same, but the application was not on record.
3. The court found that the order rejecting the petitioner’s application lacked reasoning and was unsustainable.
4. The court allowed the petitioner to file an application for revocation of the cancellation of its GST registration within two weeks.
5. The Proper Officer was directed to consider the application and pass a speaking order within one week, uninfluenced by previous orders.
6. The court instructed the Proper Officer to also consider the petitioner’s request to amend the records and update its current place of business.

Case Synopsis:

This is a judgment from the High Court of Delhi, dated October 20, 2023, in the case of Kordient Ventures Pvt. Ltd. vs. Commissioner, Delhi GST and others. The petitioner, Kordient Ventures Pvt. Ltd., filed this petition to challenge the cancellation of its GST (Goods and Services Tax) registration.

The petitioner had received a Show Cause Notice (SCN) on September 9, 2022, proposing the cancellation of its GST registration due to the petitioner not being found functioning or existing at its principal place of business. The petitioner was directed to reply to the SCN and appear before the concerned officer, but no specific date or time was mentioned. The petitioner’s GST registration was also suspended from September 9, 2022.

The petitioner claimed that it had changed its place of business and had applied for the same on October 23, 2020. However, the application was not on record. The Proper Officer had issued a Show Cause Notice on November 2, 2020, proposing to reject the application and stating reasons related to the nature of possession and missing documents. The petitioner was given until November 10, 2020, to reply to the Show Cause Notice. Subsequently, on November 11, 2020, the petitioner’s application for adding or amending the place of business was rejected, but no reasons were provided in the order.

The petitioner’s counsel pointed out that the SCN was issued before a field visit conducted on December 6, 2022. The field visit report indicated that the petitioner’s manager was present at the premises, but the petitioner was not functioning from the principal place of business.

Based on the above facts, the court disposed of the petition by allowing the petitioner to file an application for revocation of the cancellation of its GST registration. The petitioner was also directed to substantiate that it is carrying on its business from another premises. If the application for revocation is filed within two weeks from the date of the judgment, along with the relevant documents, the Proper Officer is required to consider the application and pass a speaking order within one week, without being influenced by the previous orders.

Additionally, the Proper Officer was instructed to consider the petitioner’s request to alter the records and amend its current place of business, despite the previous order dated November 11, 2020, which was deemed unsustainable due to its lack of reasoning.

In summary, the court allowed the petitioner to file an application for revocation of the cancellation of its GST registration and directed the Proper Officer to consider the application and the request to amend the records. The court emphasized that the Proper Officer should pass a speaking order, providing reasons for the decision.

FAQ:

Q1: What was the reason for the cancellation of Kordient Ventures’ GST registration?

A1: The cancellation was proposed because the petitioner was not found functioning or existing at its principal place of business.

Q2: Did the petitioner apply to change its place of business?

A2: Yes, the petitioner claimed to have changed its place of business and had applied for the same, but the application was not on record.

Q3: What did the court direct the Proper Officer to do?

A3: The court directed the Proper Officer to consider the petitioner’s application for revocation of the cancellation of its GST registration and to pass a speaking order within one week, providing reasons for the decision. The Proper Officer was also instructed to consider the petitioner’s request to amend the records and update its current place of business.

1. The petitioner has filed the present petition, inter alia, impugning

an order dated 12.12.2022 (hereafter ‘the impugned order’) cancelling

the petitioner’s GST registration. The petitioner also impugns a Show

Cause Notice dated 09.09.2022 (hereafter ‘the SCN’), pursuant to

which the impugned order was passed.

2. The petitioner was issued the SCN proposing to cancel the petitioner’s GST registration for the reason that it was not found functioning / existing at its principal place of business. The petitioner was directed to furnish a reply to the SCN and also appear before the concerned officer at the appointed date and time, but no such date or time was specified. The petitioner’s GST registration was also suspended with effect from 09.09.2022.

3. It is the petitioner’s case that it had changed its place of business and had duly applied for the same on 23.10.2020. The said application is not on record. However, pursuant to the said application, the Proper Officer had issued a Show Cause Notice dated 02.11.2020 proposing to reject the same and stating the following reasons for doing so:

“Principal Place of Business - Nature of Possession - Others (Please specify) - Document not uploaded for addition”. The petitioner was also

directed to furnish a reply to the said Show Cause Notice by 10.11.2020.

4. Thereafter by an order dated 11.11.2020, the petitioner’s application for adding / amending the place of business was rejected. The said order does not disclose any reasons for the same. The space where the reasons were supposed to be set out, is left blank.

5. The learned counsel for the petitioner also points out that the SCN was issued prior to the field visit which was conducted on 06.12.2022. The report of the said field visit indicates that the petitioner’s Manager was present at the premises, but the petitioner was not functioning from the principal place of business.

6. It is apparent from the above that the petitioner’s registration has

been cancelled as the respondents have not permitted the petitioner to

update the records to reflect its current place of business.

7. In view of the above, we consider it apposite to dispose of the present petition by permitting the petitioner to file an application for revocation of cancellation of its GST registration, and also substantiate that it is carrying on its business from another premises. If the said application for revocation of cancellation of GST registration is filed within a period of two weeks from today along with the relevant documents, the Proper Officer shall consider the same and pass a speaking order within a period of one week from the said date, uninfluenced by the previous order(s).

8. The Proper Officer shall also consider the petitioner’s request for altering the records to amend its current place of business, notwithstanding the order dated 11.11.2020, as the said order being unreasoned, is clearly unsustainable.

9. The petition is disposed of in abovesaid terms.

VIBHU BAKHRU, J

AMIT MAHAJAN, J

OCTOBER 20, 2023