Facts of the Case

The petitioner, Athimattathil Anumol, aged 37, is the proprietrix of M/s. A-1 Agro Spices, Greenvalley Road, Thenkalam, Kothamangalam, Ernakulam District, registered under GST vide a registration certificate in Form GST REG-06 dated 24 February 2023. On the basis of an enquiry, the jurisdictional State Tax Officer found that the petitioner did not conduct any business from the declared place of business. Consequently, a show-cause notice (Ext.P3) dated 9 June 2023 was issued calling upon the petitioner to reply within seven working days. The petitioner admittedly did not respond to the notice. In the meantime, the Department also blocked the input tax credit reflected in the petitioner's electronic credit ledger vide a portal action dated 3 June 2023 (Ext.P5). On 1 July 2023, the first respondent passed the impugned order (Ext.P4) cancelling the petitioner's GST registration on the ground that she was not conducting business from the declared premises. Aggrieved, the petitioner approached the High Court of Kerala at Ernakulam under Article 226 of the Constitution, filing WP(C) No.25757 of 2023, along with copies of her GSTR-3B returns for February, March and April 2023 to demonstrate continuing business activity.

Issues Involved

  1. Whether the order cancelling the petitioner's GST registration for not conducting business from the declared place suffered from any jurisdictional error or gross illegality warranting interference under Article 226.
  2. Whether the petitioner, having failed to respond to the show-cause notice, should be relegated to the statutory appellate remedy under Section 107 of the CGST/SGST Act instead of seeking writ relief.

Petitioner's Arguments

  • Challenged the cancellation order (Ext.P4) as being unjustified, relying on GSTR-3B returns filed for February, March and April 2023 to show that the business was in fact being carried on.
  • Placed on record the registration certificate (Ext.P1) and the portal page (Ext.P5) showing that the Department had already blocked her input tax credit even before the cancellation order was passed.
  • Sought quashing of the cancellation order through writ jurisdiction rather than pursuing a statutory appeal.

Respondent's Arguments

  • The State Tax Officer and the Commissioner of State GST relied on the field enquiry which found that no business was being conducted from the declared premises.
  • Pointed out that a show-cause notice (Ext.P3) had duly been issued on 9 June 2023 granting seven working days to reply, but the petitioner did not avail of that opportunity.
  • Submitted that the cancellation order was validly passed after following due procedure and did not warrant interference in writ jurisdiction.

Court Order/Findings

  • The Court found, on facts, that the enquiry disclosed the petitioner was not conducting business from the declared address, and that the petitioner had admittedly failed to reply to the show-cause notice despite being granted seven working days.
  • Held that the impugned order (Ext.P4) was not without jurisdiction, nor did it suffer from any gross illegality requiring interference by the Court under Article 226.
  • Operative direction: the Court declined to interfere with the cancellation order but granted the petitioner liberty to file a statutory appeal under Section 107 before the Appellate Authority within ten days from the date of judgment.
  • Liberty reserved: if such an appeal is filed, it is to be considered strictly on its own merits, without being influenced by any observation made by the Court in the present judgment.

Important Clarification

A writ court exercising jurisdiction under Article 226 will ordinarily not disturb a GST registration-cancellation order merely because the assessee is aggrieved, especially where the order is preceded by a valid show-cause notice and the assessee has failed to avail of the opportunity to reply. In such cases, the statutory appellate remedy under Section 107 remains the appropriate forum, and courts frequently grant a short extended window to invoke that remedy where the limitation period would otherwise have lapsed, while making clear that the appeal must be decided independently on merits.

Sections Involved

  • Central Goods and Services Tax Act, 2017 and the corresponding State GST Act – Section 29 (cancellation of registration) and Section 107 (appeals to the Appellate Authority).
  • Article 226 of the Constitution of India, 1950 – writ jurisdiction invoked to challenge the cancellation order.
  • Form GST REG-06 and GST DRC/portal proceedings relating to blocking of input tax credit.

Decision – In Favour of

The outcome is essentially in favour of the Department on merits, as the Court refused to interfere with the cancellation order and found no jurisdictional infirmity in it. However, the petitioner was not left remediless: she was granted a limited window to pursue a statutory appeal under Section 107, to be decided independently on its own merits, keeping the door open for relief at the appellate stage.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.25757 of 2023
  • CNR: Not available
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 4 October 2023
  • Disposal Nature: Writ petition disposed of with liberty to file statutory appeal under Section 107

Link to Download the Order

Download the full judgment (PDF)

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.