GST Registration Cancellation cannot be revoked due to undivided property disputes: J & K & L HC

The Jammu and Kashmir & Ladakh High Court have ruled that a Goods and Services Tax (GST) registration provided to the assessee and later canceled upon request cannot be canceled only because of property issues with the applicant’s brother.

The appellant petitioned the High Court to have the licenses awarded to the Samci Restaurant restored after they were revoked by the State Taxes Officer, GST, and the Assistant Commissioner, Food Safety, Department of Drug and Food Control Organization, J&K.

The petitioner’s restaurant’s Food Safety and Tax Licenses were both revoked at the request of the petitioner’s brother. In this context, a Writ Petition was filed with the Jammu and Kashmir and Ladakh High Courts.

Dissatisfied with the judgment of the writ petition seeking revocation of registration, the appellant filed this appeal for consideration by the division bench of the Jammu and Kashmir and Ladakh High Courts.

The respondents-revenue stated that the power connection, registration of the store under the Shops Establishment Act, and receipt of taxes paid by the petitioner’s brother were all lawfully filed and considered for cancellation of the registration.

The High Court held that “registration of the business unit, the same stands canceled” and restricted the operation/running of the Restaurant until the license was granted in favor of the deserving party, observing that the proper course in law was to leave the concerned authority free to decide who, out of the two, fulfills the criteria for holding a license.

On behalf of the appellant, Advocate M. A. Qayoom and Advocate Mian Tuffail argued that the application for cancellation of registration of Samci Restaurant was falsely represented to have been made by him while it appears to have been the fault of some of his employee-accountants. According to reports, the application has still to be decided.

The court took note of the ongoing property dispute between the appellant’s brother and the appellant himself but declined to rule on the merits of that disagreement.

It was argued by Advocate General D C Raina, who represented the Union Territory of Jammu and Kashmir, that there is no prospect of fraud by a third party in requesting revocation of the registration. The rationale given was that the canceling process, being online, required the submission of specific sensitive information that would have been shared only with the applicant.

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