Physical Verification Without issuing Notice for Under GST Registration Violates Natural Law

For the above subject, two Practical Question arises when it's come to GST Registration.Those are as follows:

1. Can GST Registration be cancelled for non-verification of Premises?

2. Can such Verification be carried by Department in absence of Assessee without issuing him Notice of Verification time ensuring his presence?

These were the issues before Delhi High Court.

Assessee filed application for relocation of his Principal Place of Business in June'2018

A Show Cause Notice was issued on 04-Dec-2018 for proposing cancellation of Registration due to failure of Physical Verification which was duly replied on 07-Dec-2018.

Physical Verification are governed by Rule 25 which mandates that Physical Verification has to be done in Presence of the Assessee whereas the said Physical Verification was done without issuing intimation to the Assessee or without ensuring his presence.

The Delhi High Court held that such Verification without presence of Assessee such Verification cannot be conducted.

Case: Bimal Kothari vs Assistant Commissioner (DGST)

Court: Delhi High Court

Citation: WP(C) 9207/2019 & CM No37947/2019

Dated: 01-Nov-2022

Section: Rule 25

Delhi High Court in

1) Micro Focus Software Pvt Ltd

2) Curil Tradex Pvt Ltd

have given similar Judgements regarding procedure to be followed in case of Physical Verification of Premises.

Calcutta High Court in case of Rohit Varma also defined the procedure to be followed.

In case of Rohit Varma his application of Revocation of GST Registration was rejected by the Department as his Physical Verification was not completed because Receptionist of the building could not recognise the face of Rohit Varma.

Calcutta High Court in this case rejected the claim of Department and guided them how verification should be done in such cases.

Rule 25 should be understood as per the common parlance which are as follows:

A) Notice for Physical Verification should be given to ensure presence of the Assessee

B) In case there is failure a Notice should be issued to concerned person and call them to Department.

C) In case issue is with person and Landlord, notice should be issued to both and both should be called to Department.

Our Opinion :

Article 19(1)(g) of Constitution grants Fundamental Right to Practice any Business or Trade or Profession.

Cancellation of GST Registration violates the basic fundamental rights to earn and livelihood.