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Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

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GST Update No 279 on cancellation of registration on arbitrary basis

GST Update No 279 on cancellation of registration on arbitrary basis

Opinion

Time and again the revenue authorities are bashed by the Hon’ble High Courts on acting frivolously and negligently. There had been various cases in the erstwhile indirect tax regime wherein the cost was imposed on the revenue department for acting arbitrarily as it is often observed that the departmental authorities do not consider the submissions of the taxpayers. Recently, one case was reported on similar issue before the hon’ble ALLAHABAD HIGH COURT in the case of DRS WOOD PRODUCTS V/S STATE OF U.P. wherein the departmental authorities have cancelled the GST registration arbitrarily. The decision imparted in this case is subject matter of discussion of our present update.
The petitioner filed the appeal as on 18.01.2021 against the order wherein the application for revocation of cancellation of registration was rejected. The petitioner is engaged in the business of manufacturing and trading of Veneer and was granted GST registration. A show cause notice was issued alleging that registration is liable to be cancelled since the taxpayer is non-functioning and non-existing at the principal place of business. Subsequently, order for cancellation of registration was also passed. The petitioner when tried to upload the E-way bill, came to know that the registration of the firm was cancelled and hence applied for revocation of cancellation of registration. It was submitted that the said application is filed within time as prescribed under Section 30 of the Act. However, the application filed was objected by way of issuance of show cause notice. The petitioner further moved an application seeking extension of 15 days for filing reply to the show cause notice due to marriage of daughter of the petitioner. However, no attention was paid to the request of the petitioner and the application for revocation of registration was also rejected alleging that no satisfactory explanation was provided by the petitioner. The petitioner, therefore, filed an appeal and submitted that the business was running from the premises under
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consideration. The Appellate Authority dismissed the appeal stating that upon investigation by the departmental officers, it was concluded that no business or activity was undertaken on the property. Further one of the partners was on the phone and did not gave any clear reply. Furthermore, there were no stocks or commercial activity found on the business premises. Moreover, it was recorded in the inspection report that another firm in another name and GSTN was found working from the same spot. Hence, it is an outright example of tax evasion.
The Counsel of the petitioner contended that the initial SCN based on which registration was cancelled was never served upon the petitioner. It was submitted that the appellate authority has erred in dismissing the appeal since the inspection report is of 2020 and inquiry was conducted in 2018 which were neither supplied to the petitioner and nor petitioner was confronted to respond to them. It was argued that none of the grounds as provided under Section 29 of the Act were established against the petitioner. Reference was drawn on to the decision of Apex Court in the case of Oryx Fisheries Private Limited V/s Union of India and Ors. and on Commissioner of Central Excise, Bangalore V/s Brindavan Beverages (P) Ltd and Ors. Further reference was drawn to various rulings of this Court i.e. Apparent Marketing Private Limited V/s State of U.P. & Ors. M/s Ansari Construction V/s Additional Commissioner Central Goods and Service Tax (Appeals) and M/s S.S traders V/s State of U.P. & Ors.
The Counsel of respondent argued that on the grounds of investigation being carried on, it can be stated that on the place of business of firm, no business activity was undertaken and another business firm was working on the same business site as well. The partner of the firm even did not cooperate during the investigation and no reply was submitted by the petitioner. Further, it was argued that the petitioner might have kept the goods at any other place.
The Court held that the show cause notice issued depicts the opaqueness of allegation raised against the petitioner. The show cause notice does not indicate any date as to when the investigation was carried out. Therefore, the vaguely issued SCN is violative of principles of administrative justice. Cancellation of registration is a serious consequence which thereby affects the fundamental
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rights of carrying business. The casually issued notice demonstrates that the departmental authorities were not judicially trained since the same is lacking in terms of quasi-judicial fervor since no reasoning is mentioned. The order rejecting the revocation application has taken the matter to the height of arbitrariness since no reasons were recoded in the same. Further, the adjournment request of the petitioner was also not adhered to. The investigation report on which the Appellate Authority relied on was never communicated to the petitioner. Thus, highlighting the arbitrary manner in which quasi-judicial and appellate authorities are working under GST Act. The manner of disposal can neither be appreciated nor accepted. Therefore, the authorities have failed to act in the light and spirit of the GST Act. Furthermore, it was stated that arbitrary exercise of power of cancellation of registration not only affects the business of the petitioner adversely but also the flow of revenue that could have flowed to the department. The action of the authorities is not in line with the principle of ease of doing business. It was therefor held that the registration of the petitioner shall be renewed and directed to State Government to pay the cost to the petitioner of Rs. 50,000/-.
The above decision has proved to be a silver lining for the trade and industry. It is high time that these Judicial Rulings should be taken into consideration by the department before initiating proceedings for cancellation of GST registration which adversely effects the business and revenue flow to the government.

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