Madras HiC rejects cancellation of GST registration following temporary identification notice

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Synopsis

The Madras High Court recently considered procedural errors in the cancellation of GST registration and assessment of tax liability of a shop in Mettur, Tamil Nadu. The court held that show cause notices were improperly served on the store through temporary ID, which did not meet the requirements of Section 169 of the Central Goods and Services Tax Act, 2017 ( the CGST Act), as the store did not have access to it. IDENTIFIER.

Justice Senthilkumar Ramamoorthy observed that proper service of notices as described in Section 169, which includes methods such as physical delivery, registered post or electronic mail, was not followed and the tax liability was calculated using the automatically populated data from GSTR-2A without giving the store an opportunity to present its case or consider its objections.

In this case, the GST registration of the petitioner, Annalakshmi Stores, was canceled retrospectively with effect from August 31, 2017, due to its inability to file returns for six consecutive months. The GST department issued show cause notices in Form GST ASMT-14, but these were uploaded on a temporary ID which the petitioner claimed he could not access.

The petitioner argued that he was unaware of the notices, which prevented him from filing returns or appealing tax requests.

Learned counsel for the petitioner submitted that issuance of show cause notice in Form GST ASMT-14 was mandatory if proceedings were initiated under Section 63 and uploading of such notice on exhibit d The temporary identity did not constitute service of notice pursuant to section 169 of the applicable law. GST Proposal.

She argued that the show cause notices were not served improperly as they were sent to a temporary ID which they could not access.

The GST department argued that the temporary ID was accessible to the petitioner, with the corresponding password sent to the registered email address and mobile number linked to his initial GST registration. Despite this, the court found that the applicant was not given a fair opportunity to participate in the evaluation process.

The court noted that using the total purchase value as a basis, the taxable value was arrived at and the transport and miscellaneous charges as well as the gross profit were added to it and this exercise was carried out without hearing the petitioner in person.

Therefore, the court set aside the assessment orders made under Section 63 and issued show cause notices due to non-compliance with procedural requirements and principles of natural justice, remitting the matter to the Court of Justice. GST for proper reconsideration, ensuring proper service of notice and allowing the petitioner an opportunity to be heard.

Case Title: Annalakshmi Stores v. Deputy State Tax Office and another