High Court Slams Arbitrary Cancellation of GST Registration
Madhya Pradesh High Court comes down heavily on the GST Department for unjust cancellation of registration based only on physical verification at an old office address!
Let us have a Short Overview of the case:
In Empire Steel Holdings vs Union of India & Ors, the Hon’ble High Court:
1. Quashed the cancellation of GST registration, which was based on physical verification at a premises vacated due to poor business.
2. Noted that inward supplies in GSTR-2A were verified as genuine by the Joint Commissioner, who had also dropped the penalty proceedings.
3. Held that just because the business premises was locked does not make a firm “bogus”!
4. Highlighted procedural lapses in physical verification, violating Rule 25 of the CGST Rules, 2017.
5. Imposed a cost of ₹10,000 on the department for arbitrary action.
“The learned Commissioner has already examined GSTR-2A and held that the supplier is in existence and active – reflecting genuineness of the purchase.”
This judgment reiterates the importance of:
Substantive verification over procedural technicalities
Upholding taxpayer rights
Curbing departmental overreach
The copy of the order is as under:
