Revocation of Cancelled Registration

         Registration of Purchasing Dealer cannot be Cancelled for Fraud Committed by Selling Dealer

         Cancellation of Registration is not Sustainable when department has failed to prove that ITC was availed with full knowledge of Seller being non-existent.

[2021] 132 taxmann.com 146 (Orissa)

HIGH COURT OF ORISSA

Bright Star Plastic Industries

v.

Additional Commissioner of Sales Tax*

DR. S. MURALIDHAR, CJ.

AND B.P. ROUTRAY, J.

W.P.(C) NO. 15265 OF 2021

 

October 4, 2021

Registration - Revocation of cancelled registration - Show cause notice for cancellation of registration was issued alleging claim of input tax credit on fake invoices issued by non-existent supplier - Registration was cancelled holding that clarification submitted was not satisfactory - Application filed for revocation of cancellation of registration was rejected - Appeal was filed before the Appellate Authority and the same was rejected - HELD: For fraud committed by selling dealer, registration of purchasing dealer cannot be automatically cancelled - Rule 21 of Odisha GST Rules is not invocable as none of the clauses applicable - Impugned appellate order fails to discuss explanation offered by petitioner - Registration of seller was cancelled much after purchase of goods by petitioner - For fraud, department to prove that petitioner availed input put tax credit with full knowledge of selling dealer being non-existent and seller and purchaser had acted in connivance to defraud revenue and such burden not discharged - Impugned orders set aside and department directed to restore registration and permit petitioner to file returns [Section 29 of the CGST Act, 2017, read with rule 21 of the Odisha Goods and Services Tax Rules, 2017/Section 29 of the Odisha GST Act, 2017, read with rule 21 of the Odisha GST Rules, 2017] [para 16, 18, 19, 20] [In favour of assessee]