Kerala High Court

M/S. Steel India vs The State Tax Officer on 7 November, 2024

Author: P Gopinath

Bench: P Gopinath

                                                          2024:KER:83402

             IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
              THE HONOURABLE MR. JUSTICE GOPINATH P.
THURSDAY, THE 7TH DAY OF NOVEMBER 2024 / 16TH KARTHIKA, 1946
                     WP(C) NO. 17781 OF 2024
PETITIONER:
           M/S. STEEL INDIA,
           IX/205, MAMPULLY, KANDASSANKADAVU,
           THRISSUR, PIN - 680 613,
           REPRESENTED BY ITS MANAGING PARTNER,
           BIJU CHETTUKULAM SURENDRAN.

           BY ADVS.
                   R.SREEJITH
                   K.KRISHNA
                   ACHYUTH MENON
                   PADMANATHAN K.V.



RESPONDENTS:

     1     THE STATE TAX OFFICER,
           TAX PAYER SERVICES CIRCLE,
           STATE GOODS & SERVICES TAX DEPARTMENT, NATTIKA,
           THRISSUR, PIN - 680 004.

     2     STATE OF KERALA,
           REPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT,
           GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM,
           PIN - 695 001.

     3     THE JOINT COMMISSIONER (APPEALS),
           STATE GOODS & SERVICES TAX DEPARTMENT,
           THIRD FLOOR, STATE GST COMPLEX, POOTHOLE,
           THRISSUR, PIN - 680 004.

           BY ADV. JASMIN M M(GP)


      THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON   07.11.2024,   THE   COURT    ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
                                                        2024:KER:83402
WP(C) 17781/2024                    2



                           JUDGMENT

The petitioner has approached this Court challenging

Ext.P4 order cancelling the registration granted to the

petitioner under the Central Goods and Services Tax/State

Goods and Services Tax Acts, 2017 (CGST/SGST Acts) as

also Ext.P7 order of the Appellate Authority confirming the

decision of the original authority.

2. The brief facts of the case are that the petitioner was

issued with Ext.P2 show cause notice calling upon the

petitioner to show cause as to why the registration of the

petitioner should not be cancelled for the following reasons:

"1.Rule 21(a) - person does not conduct any business from declared place of business.

2. Rule 21(b) - person issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made thereunder".

The reply filed by the petitioner to Ext.P2 is on record as

Ext.P3. In Ext.P3, the petitioner stated as follows:

I. "Clarification for- Rule 21(a)-person does not conduct any business from declared place of 2024:KER:83402

business:

As explained earlier, our business operations have ceased temporarily w.e.f. 01.10.2022 and we are not having any business w.e.f. 01.10.2022. The Place of Business declared in our GST Registration is a rented place and there were some disputes with the landowner relating to rental payments, due to which the rental payments for a few months fell due. We intend to continue our business when the business conditions improve.

II. Clarification for- Rule 21(b)- person issues invoice or bill without supply of goods or services or both in violation of the provisions of the Act, or the rules made thereunder:

As already explained, our business activity was ceased temporarily w.e.f. 01.10.2022 and we are not having any business w.e.f. 01.10.2022. We have not issued any tax invoices w.e.f. 01.10.2022. Therefore, your allegation that we have issued Invoices without supply is not correct. As can be seen from our GSTR-1 and GSTR-3B that our outward supply is Nil from the tax period October 2022. We have carried on business activities upto 30.09.2022 and have issued Invoices to customers and uploaded the Invoices in GSTR-1, paid taxes and filed GST Returns on time".

The original authority by Ext.P4 order found that the 2024:KER:83402

explanation submitted by the petitioner was not satisfactory

and therefore proceeded to cancel the registration of the

petitioner. The petitioner preferred W.P(C)No.29033/2023,

challenging the order of cancellation. This Court, after

examining the contentions of the petitioner in detail,

dismissed the writ petition by judgment dated 05-10-2023.

The petitioner carried the matter to a Division Bench of this

Court. The Division Bench, by judgment dated 26-10-2023 in

W.A.No.1859/2023, permitted the petitioner to approach the

Appellate Authority by filing a statutory appeal. The

Appellate Authority dismissed the appeal by Ext.P7 order

after considering each and every contention taken by the

petitioner. It is thus that the petitioner is before this Court.

3. The learned counsel appearing for the petitioner

submits that the registration of the petitioner was cancelled

for two reasons. It is submitted that the first reason was

that, according to the officer, the petitioner had stopped

business at the place mentioned in the certificate of

registration. The second reason was that the petitioner had

issued certain fake invoices without actual supply of goods.

2024:KER:83402

It is submitted that both these reasons are unsustainable,

and the petitioner was actually conducting business at the

premises in question till October, 2022. It is submitted that

the petitioner had stopped business owing to financial

difficulties. It is submitted that there is no material

whatsoever to show that the petitioner issued invoices

without actual supply of goods.

4. The learned Government Pleader submits that the

petitioner has made out no case for restoration of the

registration granted to the petitioner. It is submitted that

the contentions raised by the petitioner were earlier

examined by the learned Single Judge of this Court in the

judgment dated 05-10-2023 in W.P(C)No.29033/2023. It is

submitted that the original authority had also considered all

the contentions taken by the petitioner in detail, and

following the judgment of the Division Bench of this Court in

W.A.No.1859/2023, the matter had been considered in detail

by the Appellate Authority also. It is pertinently pointed out

that the petitioner cannot have any grievance regarding

cancellation of registration, and if the petitioner wishes to 2024:KER:83402

restart the business, it can very well apply for fresh

registration after complying with all formalities.

5. Having heard the learned counsel for the petitioner

and the learned Government Pleader, I am of the view that

the petitioner has not made out any case for interference

with the impugned orders. A perusal of Ext.P4 order of the

original authority will show that the contentions taken by the

petitioner had been considered by the original authority, and

there was a specific finding that the petitioner was not

conducting business in the premises mentioned in the

certificate of registration. It is also seen from Ext.P4 that,

according to the statement recorded from the landlord of the

petitioner, the premises in question were leased out to the

petitioner for conducting iron and steel business from 2012

to May 2017, and thereafter no business had been

conducted by the petitioner in the said premises. It is also

seen that the premises were thereafter leased out by the

landlord to another person, who had no relation whatsoever

with the petitioner. The original authority therefore

recorded that it is evident that the details provided at the 2024:KER:83402

time of migration from the registration under the VAT to

GST were false and the registration of the petitioner is

therefore liable to be cancelled. Following the directions

issued by the Division Bench of this Court in

W.A.No.1859/2023, the Appellate Authority also considered

the contentions taken in detail and found as follows:

"11. The first issue to be decided in this case is whether the appellant had conducted business from the tenanted premise IX/205, Kandassankadavu for the period from May 2017 to 24-06-2023.

The primary statutory document to establish a business place is the license issued by the Local Panchayath. In the case, the appellant had not obtained panchayath license for the disputed period. Further, in rented buildings, the electricity charges are being paid by the lessee, even though receipt is issued in favour of lessor. The appellant could not produce electricity charges paid by him for the period May 2017 to 24-06-2023. The appellant could not produce any other statutory documents viz. Registration certificate issued by the labour department etc. to prove his existence in Room No. IX/205, Kandassankadavu.

The appellant produced the following evidences to prove his existence at the disputed room No.IX/205, at Kandassankadavu. Each document 2024:KER:83402

produced by the appellant is enlisted below and the reason for acceptance/rejection by me is mentioned against each items.

a) Income tax return for the assessment years 2015-

16 to 2022-23:-

The income tax return is filed based on the PAN issued to the assessee and it can even file without a building number. So income tax return cannot be accepted as a proof for existence of running business place at Room No:IX/205.

b) Tax invoices and E-way Bills issued by the supplier in the name of the appellant and those issued by the appellant.

The invoices and document produced by the appellant proves that the appellant is engaged in bill trading. The appellant receives the goods as per supply invoices and subsequently supplies the same, without unloading as there is no business place. So tax Invoices and E-way Bills cannot be accepted as proof of evidence as it can be issued without a business place.

c) Bank statement of account-

Bank statement produced by the appellant cannot prove the existance of business place during the disputed period May 2017 to 24-06-2023. The address in the bank statement will be the address given at the time of opening the account. The address will not change unless changed by the account holder. In this case, the appellant himself 2024:KER:83402

being the account holder, not changed the address and continued the bank transactions through that account. So the bank account statement is also rejected.

d) Affidavit dated 18-11-2023 of Sri. Dileesh.V.C. and Ashish.P.S:-

In the sworn affidavit, the deponents affirm that a business by M/s. Steel India, engaged in the trading of Iron and Steel was functioning at IX/205, Mampully, Kandassankadavu, Thrissur for quite some time and the business was being managed by Sri. Biju Surendran.

The above deponents affirm that M/s. Steel India, i.e the appellant firm was functioning at IX/205 for quite some time. The affidavit did not state that whether the appellant business is running at IX/205, during the disputed period, May 2017 to 24-06-2023. Mentioning "quite some time" cannot be accepted as there is specific allegation that the appellant business place is not existed at room No. IX/205 during the period May 2017 to 24-06-2023.

e) Form No.17 notice and Form No.1 recovery notice issued by the commercial tax/SGST Department. The appellant produced copies of the said notices issued be the commercial tax/SGST department, which were delivered to him by the postman. Even if business place is not existing, the tapal will be delivered to the addressee, by the postman based on the instructions. In this ease also, the appellant 2024:KER:83402

should have received the official communication based on the Instructions given by him to the postman. So these documents also did not prove the existence of the business place at room No.IX/205.

To conclude, none of the documents produced by the appellant could not establish the existance of business place of the appellant at room No: IX/205, at Kandassankadavu. The appellant did not held or obtained any statutory documents like panchayath license, which is a mandatory one to run the business. In addition to above, the Senior Enforcement Officer, Enforcement Squad, SGST Department, Thrissur and the respondent himself, on enquiry have found that the appellant has no business place at room No. IX/205, since May 2017. So, I find the appellant have obtained registration by means of fraud, wilful misstatement or suppression of facts, enabling the respondent to initiate action under Section 29(2)(e) of the Act. Hence, the impugned order issued by the respondent is found to be in order.

12. In these circumstances, the following order is issued:

ORDER

13. The appeal No.AD3210230045212 (GSTA-629T/23) filed by M/s.Steel India, IX/205, Mampully, Kandassankadavu, Thrissur, Kerala, 680613 (GSTIN 32ACGFS5443R1ZL) is rejected and the order No.ZA320623032284Y dated 24-06-2023 2024:KER:83402

(32ACGFS5443R1ZL/2023-24 dated 24-06-2023) issued by the State Tax Officer, Taxpayer Services Circle, Nattika is upheld.

RESULT:GSTA-629T/23 (2023-24); DISMISSED".

There is nothing on record to indicate that any of the

findings recorded by the Appellate Authority are wrong and

require interference at the hands of this Court under Article

226 of the Constitution of India. That apart, as rightly

pointed out by the learned Government Pleader, if the

petitioner intends to restart the business, it will always be

open to the petitioner to apply for fresh registration after

complying with formalities.

In the light of the above, I find no reason to entertain

this writ petition. Writ petition fails, and it is accordingly