Delhi High Court held that it is against the natural justice concept to physically inspect business locations for GST registration without first giving notice.
In the instant case titled Curil Tradex Pvt ltd v. The Commissioner, Delhi Goods And Services, Tax & ANR., the issue raised before the Delhi High Court was:
Was it reasonable to cancel the registration for the petitioner without proper notice?
With regard to the issue, the court noted that the show cause notice served as the basis for the registration revocation. A letter from the Deputy Commissioner (DC), CGST—Delhi South Commissionerate, was referenced in the show cause notice. After issuing the show cause notice, the respondents/department suspended the petitioner's registration.
The court stated that the petitioner was given 15 days to submit an application for the order of cancellation's revocation by the court. Within two weeks after the date of submission, the concerned officer will decide on any applications that have already been submitted. The appropriate officer will issue a spoken order, a copy of which will be given to the petitioner.
It was observed that according to Rule 25 if the proper officer determines after the registration has been granted that a physical inspection of the concerned person's place of business is necessary, the proper officer may arrange for the inspection to be done in the person's presence. After that, within 15 working days of the date of the verification, have the verification report and other documents, including photos, posted on Form GST REG30 on the common platform.
The court categorically stated Rule 25 of the 2017:
“Physical verification of business premises in certain cases.- Where the proper officer is satisfied that the physical verification of the place of business of a person is required due to failure of Aadhaar authentication before the grant of registration, or due to any other reason after the grant of registration, he may get such verification of the place of business, in the presence of the said person, done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG30 on the common portal within a period of fifteen working days following the date of such verification.”
Hence, the writ petition was allowed.