Allowed

Cylos Consulting Private Limited v. Union Territory of Chandigarh and Others

Punjab & Haryana HC17 Dec 2024CWP/12739/2024

Case brief

AI extract

What is this about?

The High Court allowed the writ petition, quashing orders that cancelled the petitioner's GST registration following an inspection where the principal person was absent. The court restored the registration, citing unsustainable assumptions and adherence to a coordinate bench's reasoning.

What did the court decide?

The GST registration number of the petitioner is restored; the cancellation order dated 20.03.2023, the rejection order of 28.04.2023, and the appeal order of 14.05.2024 are set aside.

Cylos Consulting Private Limited Vs Union Territory of Chandigarh and Others — Punjab & Haryana HC (2024) — LawSathi Research

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CWP-12739-2024 (O&M)

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Page 1 of 4

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110+232

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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CWP-12739-2024 (O&M) Date of Decision: 17.12.2024

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CYLOS CO N SULTING PRIVATE LIMITE D

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. . . . Petitione r Vs.

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UNION TER R ITORY OF CHANDIGARH A ND OTHERS

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. . . . Respondent s

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****

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**CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH ******

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Present: M r. Ankit Dhiman, Advocate wi t h M r. Varun Bansal, Advocate f or the petitioner.

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M r. Sourabh Goel, Sr. Standing C ounsel with M s. Geetika Sharma, Advocate M s. Anju Bansal, Advocate f or the respondents/Revenue.

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****

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SANJEEV PRAKASH SHARMA, J.(Oral)

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CM-20414-CWP-2024

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A pplication for placing on re c ord short reply on behalf o f respondents a long with Annexure R-1/1 i s allowed, subject to all jus t exceptions.

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R egistry to place the same at ap p ropriate place.

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Main case

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The G ST registration of the peti t ioner was cancelled by th e respon d ents vide order dated 20.03. 2 023 solely on the ground tha t

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MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document

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CWP-12739-2024 (O&M)

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Page 2 of 4

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when t h e Inspector reached the place of office, though the nameplat e mentio n ed the name of his firm, but si n ce he was not present there an d no on e else identified his office, a p resumption was drawn by th e Inspec t or that the firm was not functi o nal. The GST registration wa s accord i ngly cancelled.

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A rev o cation application was move d by the petitioner which wa s rejecte d . Thereafter, he filed an appeal b ut the same was also rejected.

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Learne d counsel for the petitioner ha s relied on judgment passed b y Coordi n ate Bench in CWP-787-2024 titled as ‘Gupta Enterprises vs. State of Punjab and others’ , decided o n 12.01.2024, to submit that th e registr a tion should be restored.

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In Gupta Enterprises (supra), after n oticing the provisions of Rul e 21(a) a nd 25 of the CGST Rules, 201 7 , and after considering that th e revoca t ion of registration has resulte d in financial loss caused to th e concer n ed businessman, the Court r e stored the registration of th e concer n ed petitioner with following ob s ervations:

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“11. Thus, the Appellate A u thority has also referred t o the Rule 23 to justify the said fa c t that the petitioner had b een duly represented at all poin t s of time. Counsel has a lso further pointed out that the ef fe ct of the revocation has s erious ramification in as much a s an order of refund of R s.10,60,000/- has been rejected by Central Goods and S ervice Tax Division-1, Derab a ssi vide order dated 1 5.02.2023 (Annexure P-16) solely on this ground that t h eir PPOB was cancelled on 09.04.2022 w.e.f. 1 4.03.2022. The civil consequenc e s of the cancellation as

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MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document

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CWP-12739-2024 (O&M)

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Page 3 of 4

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s uch, thus, apparently out-weigh t h e manner in which the r espondents have as such procee d ed in dealing with the c ase regarding the physical verific a tion which should have b een done and proper opportu n ity should have been a fforded.

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12. Thus, we are of the con s idered opinion that the i m pugned orders as such have adversely effected the b usiness prospects of the petiti o ner. Counsel for the p etitioner has very fairly not pre s sed challenge raised to t h e order of refund rejecting his r efund (Annexure P-16) s ince appeal is already pending. Accordingly, liberty is g iven to pursue his remedy regar d ing his appeal against t h e order rejecting the refund. R e sultantly, we quash the o rder dated 09.04.2022, 29.06.2022 and 27.09.2023 (A nnexures P-8, P-12 and P-18). T h e resultant effect is that t h e registration of the petitioner would come back into o peration.”

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In the p resent case, we find that merely o n one inspection, if the person i s not fou n d to be available at his place o f office, a presumption cannot b e drawn that the firm is not functional, more so when there have bee n transac t ions and the firm has been regul a rly filing its returns.

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Keepin g in view thereto, we observ e that the action taken by th e respon d ents is in haste, and the same is n ot sustainable in law.

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Accordingly, we allow this petition and set aside the order date d 20.03.2023, the order dated 28.04. 2 023 rejecting the revocatio n applica t ion, and the order dated 14.05.2 0 24 passed in appeal; and restor e the pet i tioner’s registration number. Th e petitioner would be required t o now pr o ceed according to the law and fi l e his returns.