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]