Facts of the Case

The petitioner, Bansal and Co., had its GST registration cancelled by order dated 24.05.2023, following a show-cause notice dated 05.05.2023 alleging that the petitioner had not conducted any business at its declared place of business. The petitioner claimed to have filed a detailed reply along with returns, but the cancellation order was passed regardless. On inquiry, the State's counsel informed the Court, on instructions, that the persons with whom the petitioner claimed to be doing business at the declared premises — M/s Kumar Enterprises, Ludhiana and M/s AK Enterprises, Delhi — were themselves cancelled dealers, and that neither dealt in the commodity (rice bran) the petitioner claimed to trade.

Issues Involved

  1. Whether the cancellation of the petitioner's GST registration for allegedly transacting with cancelled dealers not engaged in the petitioner's claimed line of business should be set aside by the writ court.

Petitioner's Arguments

  • A detailed reply, along with returns, had already been submitted in response to the show-cause notice before the cancellation order was passed.

Respondent's Arguments

  • On instructions, the State's counsel informed the Court that the two firms the petitioner claimed to transact with (Kumar Enterprises, Ludhiana, and AK Enterprises, Delhi) were themselves cancelled dealers, and neither dealt in rice bran, the commodity the petitioner claimed to trade — undermining the petitioner's claimed business activity at the declared premises.
  • The petitioner had a remedy of seeking revocation of the cancellation order under Section 30 of the Punjab GST Act, 2017 by filing an application before the competent authority.

Court Order / Findings

  • The Court did not independently examine or overturn the factual basis for cancellation.
  • It disposed of the petition by giving the petitioner liberty to avail the statutory remedy of revocation under Section 30 of the PGST Act, 2017, in accordance with law.

Important Clarification

Registration cancellation for operating from a 'non-existent' place of business, or for transacting with dealers whose own registrations have been cancelled, is a common enforcement action under GST law. This case confirms that the correct remedy is the statutory revocation-of-cancellation application under Section 30 of the respective State/Central GST Act, not a writ petition, and that courts will generally not go behind the Department's factual verification (such as checking whether the claimed suppliers actually deal in the stated goods) at the writ stage.

Sections Involved

  • Section 30, Punjab Goods and Services Tax Act, 2017 — revocation of cancellation of registration.
  • Central Goods and Services Tax Act, 2017 — parallel registration-cancellation framework.

Decision – In Favour of

Disposed of without setting aside the cancellation; the petitioner was directed to the statutory revocation remedy under Section 30 of the PGST Act, 2017.

Case Details

  • Court: High Court of Punjab and Haryana at Chandigarh
  • Case No.: CWP No. 12518 of 2023 (O&M)
  • Neutral Citation: 2023:PHHC:080363-DB
  • Coram: Hon'ble Ms. Justice Ritu Bahri and Hon'ble Mrs. Justice Manisha Batra
  • Date of Decision: 1 June 2023

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