Madras High Court: Anita Sumanth, J. set aside the impugned order which rejected a registration application filed under Section 22 read with Section 25 of Central Goods and Service Tax (‘CGST Act') and Rule 8 of CGST Rules, without assigning proper reasons and adhering to proper procedure.
The petitioner filed an application seeking registration in accordance with Section 22 read with Section 25 of the CGST Act, 2017 and Rule 8 of the CGST Rules, 2017 in respect of a rice mandi which was duly acknowledged, and physical verification was also duly undertaken. A notice was issued by the respondent officer seeking clarification as the application did not enclose the details of the principal place of business of the petitioner. Pursuant to which, a copy of the rental / lease deed was uploaded however, registration was refused by way of a monosyllabic order simply mentioning ‘rejected’ without assigning any reasons or explanation for rejection. Aggrieved by this, the present petition was filed.
Rule 9(4) of the Central Goods and Services Tax Rules, 2017 states:
‘9. Verification of the application and approval
………….(4) Where no reply is furnished by the applicant in response to the notice issued under sub-rule (2) or where the proper officer is not satisfied with the clarification, information or documents furnished, he [may], for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05.’
The Court noted that the word ‘may’ only refers to the discretion to reject and not to blatantly violate the principles of natural justice. If the assessing authority is inclined to reject the application, which he is entitled to, he must assign reasons for such objection and adhere to proper procedure, including due process.
Thus, the Court allowed the petition and set aside the impugned order.
[B C Mohankumar v. Superintendant of Central Goods and Service Tax, WP No. 13272 of 2022, decided on 16-06-2022]
Advocates who appeared in this case :
Adithya Reddy, Advocate, for the Petitioner;
Prakash for Mr. Rajendran Raghavan Senior Standing Counsel, Advocates, for the Respondent.
*Arunima Bose, Editorial Assistant has reported this brief.