GST Registration Cancellation Upheld by High Court Due to Non-Existent Business and Failure to Respond to SCN

The High Court of Calcutta recently ruled in favor of the GST department, upholding the cancellation of a taxpayer's GST registration due to fraudulent misrepresentation and failure to respond to the Show Cause Notice (SCN). The case highlights the importance of maintaining accurate business details and responding promptly to regulatory notices.

Case Details: Md. Firoz vs. Assistant Commissioner, Bally Salkia

  • Court: High Court of Calcutta

  • Date of Judgment: 17th February 2025

  • Case No.: WPA 30825 of 2024

Facts of the Case

The petitioner, Md. Firoz, had obtained GST registration for a business in Howrah. However, upon investigation, the Bureau of Investigation discovered that no business activities were being conducted at the declared location.

As a result, the GST department issued a Show Cause Notice (SCN) citing fraudulent misrepresentation. The petitioner failed to respond to the SCN, leading to the cancellation of his GST registration on 7th August 2023.

Despite this, the petitioner appealed under Section 107 of the CGST Act, 2017. However, the appellate authority upheld the cancellation order. Unhappy with the decision, he filed a writ petition in the High Court, arguing that the authorities did not properly consider relevant evidence.

Court’s Decision

The High Court of Calcutta dismissed the petition, stating the following:

  1. The petitioner failed to contest the Bureau of Investigation’s report, which confirmed that the business did not exist at the declared location.

  2. The cancellation order was backed by valid evidence, making the GST department’s action reasonable.

  3. The petitioner did not respond to the SCN or appear in the appeal process, which indicated a lack of compliance with GST regulations.

  4. Since the authorities followed the due process of law, the court found no grounds to interfere with the decision and dismissed the petition without imposing costs.

Key Takeaways from the Judgment

🔹 Ensure Your Business is Operational at the Declared Address
All businesses must conduct operations from the registered place of business under GST regulations. Authorities have the right to conduct physical verification.

🔹 Respond to Show Cause Notices (SCN) Promptly
Ignoring a GST SCN can lead to automatic cancellation of registration. Always reply within the given deadline to avoid legal consequences.

🔹 Maintain Proper Documentation and Records
Businesses should keep proper records to justify their GST registration and business activities in case of an inquiry.

🔹 Timely Appeals Are Crucial
If a GST registration is canceled unfairly, appeals must be backed by strong evidence. Failure to do so may result in an unfavorable judgment.

Need Assistance with GST Compliance?

If you need help with GST registration, compliance, or responding to SCNs, our experts at Taxla Services are here to assist you!

📞 Contact us: +91 9600076134 / 6374812546
📧 Email: auditsiva2@gmail.com
🌐 Website: www.taxlaservices.com

✅ Stay compliant and avoid unnecessary legal troubles!

#GSTCompliance #GSTCancellation #HighCourtRuling #Taxation #BusinessLaw #TaxlaServices #GSTLaw #SCNResponse



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