Muhammad Salmanul Faris K vs The Superintendent
2023 Latest Caselaw 9707 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
          THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
   WEDNESDAY, THE 13TH DAY OF SEPTEMBER 2023 / 22ND BHADRA, 1945
                       WP(C) NO. 25716 OF 2023
PETITIONER:

          MUHAMMAD SALMANUL FARIS K,
          AGED 28 YEARS
          S/O. USMAN K ,KALLINGAL VALLOOR, AMAYOOR, PATTAMBI,
          PALAKKAD, PIN - 679 303.

          BY ADVS.
          ASWIN GOPAKUMAR
          ANWIN GOPAKUMAR
          JIKKU SEBAN GEORGE
          DEEPTI SUSAN GEORGE
          SARANYA BABU
          NIKITHA SUSAN PAULSON
          ADITYA VENUGOPALAN
          MAHESH CHANDRAN
          SHALLET K. SAM


RESPONDENTS:

          THE SUPERINTENDENT,
          THE CGST & CENTRAL EXCISE RANGE, THE COMMERCIAL TAX
          OFFICE, OTTAPPALAM, KERALA, PIN - 679 101.

          BY ADV P.T.DINESH


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
13.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 25716 OF 2023
                                       2

                      DINESH KUMAR SINGH, J.
                   --------------------------------------------
                     WP(C) NO. 25716 OF 2023
                   --------------------------------------------
                Dated this the 13th day of September, 2023



                              JUDGMENT

1. Heard Sri. Aswin Gopakumar, Learned counsel for

the petitioner and Sri. P.T. Dinesh, Learned Counsel for the

respondent. The present Writ Petition has been filed by the

petitioner impugning Ext.P6 Order whereby the petitioner's GST

registration has been cancelled. Primarily on the ground that the

petitioner has issued Invoices/Bills to other dealers without

supplying goods or providing any services in violation of the

GST Act and Rules and such violation of raising Invoices and

Bills have made use by the purchasing dealers for availment of

the declaration of the input tax credit or refund of tax. It appears

that some intelligence input were received for fake invoicing. The

DGGI, Kochi Zonal Unit, in view of the intelligence report, vide

letter dated 11.03.2023 directed the Range Officer, Ottappalam

Range to cancel the petitioner's GST Registration, under Section

29 (2) (a) read with Rule 21 (e) of the CGST Act/Rules, 2017. WP(C) NO. 25716 OF 2023

2. The first show cause notice Ext.P2 was issued to the

petitioner on 15.03.2023. Though the reasons for issuing the

notice was written, but it was no where mentioned that where the

petitioner has to appear for personal hearing in pursuance to the

said notice. Petitioner filed Ext.P3 reply to the said notice on

24.03.2023. Considering the said reply to the show cause notice

submitted by the petitioner, Ext.P4 Order came to be passed and

the said show cause notice dated 15.03.2023 was cancelled vide

Order dated 27.03.2023. Ext.P5 Second Show cause notice

almost in identical lines was issued on 28.03.2023. The petitioner

did not submit reply to the show cause notice dated 28.03.2023.

Another communication dated 12.04.2023 was issued to the

petitioner mentioning that with reference to the investigation

launched by DGGI, Kochi Zonal Unit into a fake invoicing cartel,

indicates that the petitioner was involved in availing fake input

tax credit from multiple firms. Therefore, the Deputy Director,

DGGI, Kochi Zonal Unit has requested the Range Officer,

Ottapalam to cancel the GST registration of the petitioner and the

petitioner was given a personal hearing on 27.03.2023. However, WP(C) NO. 25716 OF 2023

it appears that the petitioner did not appear on the said date and

new date was fixed on 19.04.2023 at 11.45 am at the Central

Revenue Building, Mettupalayam Street, Palakkad. The petitioner

did not appear for the said hearing on 19.04.2023 and therefore,

Ext.P6 impugned order for cancellation of the GST registration of

the petitioner was passed.

3. The learned counsel for the petitioner submits that

when the DGGI Cochin Unit has already taken a decision and

directed for cancellation of the GST registration of the petitioner,

the competent authority could not have taken a decision contrary

to the said direction issued by the higher authority. It is further

submitted that the said direction for cancellation of the GST

registration of the petitioner was without following the due

process of the law prescribed under the statutes and rules there

under. It is wholly without jurisdiction and against the provision

of the law and, therefore, the impugned order is liable to be set

aside.

4. The learned counsel for the respondents submits that

a large cartel is operating for availing fake input tax credit. There WP(C) NO. 25716 OF 2023

has been intelligence input and investigation in respect of the

cartel and after conducting the investigation, it was confirmed

that the cartel is operating for availing the fake input tax credit,

and, therefore, DGGI, Kochi Zonal Unit directed to cancel the

GST registration certificate of the petitioner. He further submits

that the issuance of Show cause notice and opportunity of hearing

to the petitioner was granted. But the petitioner did not make use

of the opportunity of hearing and not produced any documents

and therefore, the impugned order has been passed.

5. Considering the aforesaid submissions, there is no

denial of fact that the DGGI, Kochi Zonal Unit has already taken

the decision for cancelling the GST registration of the petitioner.

In my view, the competent authority was only required to form

the formalities and the authority concerned or the competent

authority could not have taken an independent decision.

Therefore, the impugned order is set aside. However, the said

order is not revived further for a period of one month.

6. The petitioner is directed to appear before the

Superintendent of Central Tax & Central Excise, Ottapalam WP(C) NO. 25716 OF 2023

Range, Mettupalayam Street, Palakkad on 18.09.2023 with

relevant records in his possession to dispute the allegation

contained in the Show cause notice. The adverse materials

collected against the petitioner must be given to him for adverting

the same by him. After taking the evidence from the petitioner

and providing an opportunity of hearing to him, a fresh order may

be passed in accordance with law within a period of three weeks

from 18.09.2023. If the show cause is cancelled, the petitioner

would be entitled for restoration of the GST registration

certificate. However, if the authority takes a decision to cancel

the GST registration of the petitioner, he may take recourse to

appropriate proceedings as available under law.

7. It is made clear that the Superintendent of Central

Tax should take an independent decision without being

influenced by the direction of the DGGI, Kochi Zonal Unit.

8. With the aforesaid directions, the writ petition stands

disposed of.

Sd/-

DINESH KUMAR SINGH JUDGE rpr WP(C) NO. 25716 OF 2023

APPENDIX OF WP(C) 25716/2023

PETITIONER'S EXHIBITS

Exhibit P-1 A TRUE COPY OF THE REGISTRATION CERTIFICATE BEARING NO. 32MTQPK3810B1ZT ISSUED TO THE PETITIONER ON 10.01.2023 BY THE RESPONDENT Exhibit P-2 A TRUE COPY OF THE NOTICE DATED 15.03.2023 BEARING REFERENCE NO. ZA3203230212962 Exhibit P-3 A TRUE COPY OF THE LETTER DATED 24.03.2023 SUBMITTED BY THE PETITIONER TO THE RESPONDENT Exhibit P-4 A TRUE COPY OF THE NOTICE DATED 27.03.2023 BEARING REFERENCE NO. ZA320323075837G ISSUED BY THE RESPONDENT Exhibit P-5 A TRUE COPY OF THE NOTICE DATED 28.03.2023 BEARING REFERENCE NO. ZA320323078913L Exhibit P-6 A TRUE COPY OF THE ORDER DATED 20.04.2023 BEARING REFERENCE NO. ZA320423022896N ISSUED BY THE RESPONDENT CANCELLING GST REGISTRATION OF THE PETITIONER

RESPONDENT EXHIBITS Exhibit-R1 True copy of the letter dated 9.03.2023 (signed on 1 1.03.2023) by the Deputy Director, Directorate General of GST Intelligence (DGGI), Kochi Zonal Unit, Central Excise Bhawan, Kathrikadavu, Kaloor P.O, Kochi-682017 Exhibit-R2 True copy of the relevant part of the image dated 24.03.2023 of the portal of the petitioner Exhibit-R3 True copy of the relevant part of the image dated 27.03.2023 of the portal of the petitioner Exhibit-R4 True copy of the relevant part of the image dated 28.03.2023 of the portal of the petitioner Exhibit-R5 True copy of the Letter OC No.59/2023 dated 12.04.2023 issued by the Superintendent, Ottapalam Range to the petitioner