HC Restores GST Registration Over Single-Signed Visit Note

Case Details: Empire Steel Holdings vs. Union of India - [2025] 174 taxmann.com 27 (Madhya Pradesh)

Judiciary and Counsel Details

• Vivek Rusia & Gajendra Singh, JJ.
• Vashistha Narayan Dubey, Adv. for the Petitioner.
• Prasanna Prasad, Adv. for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer under the CGST Act was operating her business from a rented premises, which she later vacated due to financial constraints and shifted to her residential address. During a physical verification conducted by the GST department, the registered business premises was found locked, prompting issuance of a show cause notice for cancellation of registration. Subsequently, the petitioner’s registration was cancelled with retrospective effect, and her application for revocation was rejected on the ground of ‘Non-Genuineness of Party’.

Aggrieved by this action, the petitioner filed a writ petition before the Hon’ble High Court contending that the inspection was conducted behind her back and without any independent witness, thereby violating procedural fairness. She submitted that her business operations were temporarily slowed due to her husband’s health issues and that the relocation to a residential address was necessitated by inability to pay rent. The petitioner also produced a valid Gumasta License issued by the District Labour Officer to support her operational status.

High Court Held

The Hon’ble High Court held that the physical verification conducted in the absence of any witness and based solely on a visit note signed by the Superintendent-CGST was procedurally deficient and legally unsustainable. It observed that the Superintendent neither recorded the statement of nearby shopkeepers nor obtained any witness signature, and no other GST officer accompanied him during the inspection, which rendered the visit note unreliable for such a drastic consequence as cancellation of registration. The Court further noted that the Joint Commissioner had acknowledged the existence of the petitioner and the non-operational status being limited to the registered premises only.

Moreover, the Commissioner had already undertaken a detailed examination of the petitioner’s Form GSTR-2A for Financial Year 2017-18 to Financial Year 2022-23 and confirmed the existence and activeness of the supplier, thereby affirming the genuineness of the petitioner’s inward supplies. The Court concluded that the entire cancellation was based on a flawed presumption of the firm being bogus merely because the premises was found locked, and accordingly, directed restoration of the GST registration under Section 29 of the CGST Act/ Madhya Pradesh GST Act.

List of Cases Referred to

• Roxy Enterprises v. Union of India [2024] 158 taxmann.com 275/101 GST 855/81 GSTL 213 (Delhi) (para 8)
• Shyam Sundar Sita Ram Traders v. State of U.P. [2023] 155 taxmann.com 91/100 GST 741/79 GSTL 218 (Allahabad) (para 8).