Recently, in Sharp Print Ways vs The State of Uttar Pradesh, Allahabad High Court held that the first Appellate Authority once it had taken note about the rent agreement, should have taken into consideration that the place of business of the Assessee has changed and an opportunity should have been given to the Assessee to place all material before it and the authority should have recorded findings before rejecting the appeal confirming the order of cancellation of registration.
Overview
A Show Cause Notice was issued to the petitioner on the ground that he was not functioning/not existing at the principal place of business, which remained unreplied. A month later, the cancellation order was passed against the assessee. After getting informed regarding the same, assessee preferred statutory appeal against the cancellation order which gets rejected by the Appellate Authority and a five pages rejection order was passed out of which four were of the entire ground taken in the memo of appeal by the Assessee.
The reasoning provided was that on the date, when the survey was conducted, it was found that the Assessee was not running a business on the place which was informed to the department when the registration was done. The court held that the Authority should have taken into consideration that the place of business of the Assessee might be changed seeing the fact that it was rented. Therefore, an opportunity should have been given to the Assessee citing reasons for the same and the authority should also have recorded findings before rejecting the appeal.
Circumstances when a Cancellation notice can be issued?
The registration of a GST Registered person can be canceled by the Tax Officer under the following circumstances when…
➤ Failing to conduct the business from the declared place of business
➤ If a registered individual has violated any provisions of the Act or the rules made thereunder.
➤ Non-furnishing of returns for three consecutive tax periods by an individual registered under Composition Scheme.
➤ If the Input Tax Credit from the electronic credit ledger has been utilized to discharge more than 99% of the tax liability thus violating Rule 86B – with the total taxable value of supplies exceeding Rs.50 lakh in the month, with some exceptions
➤ If any individual doesn’t start business within 6 months from the date of taking voluntary registration.
➤ In case the taxpayer issues invoice or bill without supply of goods/services, thus violating provisions of the Act.
➤ In case of violation of any anti-profiteering provisions
➤Using fraud means, willful misstatement or suppression of facts while registering to GST
➤ If found that the taxpayer avails ITC by violating the provisions of Sec. 16 or similar provisions..
How to Respond to the Cancellation notice issued in Form GST REG-17
In response to a notice received for the cancellation of GST registration issued by the authority. Form GST REG-18 needs to be filed within 7 days of issuance of the notice by giving proper explanation or citing valid reasons for safeguarding his/her registration.
Following details is covered while replying to the notice for cancellation –
→ Name of the registered business or individual
→ The Reference Number & Date of the cancellation notice issued.
→ GST registration number of the person.
→ Reply with proper explanation to the notice including all necessary documents.
→ Verification box.
Procedure for Filing Online Reply in Form GST REG-18
Following steps should be followed for filing reply to cancellation notice in Form GST REG-18-
Move 1 – Visit the www.gst.gov.in and log into your taxpayer account.
Move 2 – Select Services > Registration > Application for Filing Clarifications.
Move 3 – Enter Application Reference Number (i.e. ARN) of the notice.
Move 4 –Click the ‘Search’ button, Form GST REG-18 will be displayed on the page.
Move 5 – Reply including all necessary supporting documents.
Move 6 – Click ‘Submit’.
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