Ajay Kumar Jindal Prop. of M/s. A.s. Fastener vs Superintendent, Ward 71, Central Goods And Services Tax, Delhi

Petitioner was registered as Proprietorship concern in Delhi. He entered into partnership with another person and got his partnership firm registered at Sonipat, Haryana.

He filed Refund application for accumulated ITC due to Inverted Duty Structure. Department without intimation did a field visit ((03-Jan-22) and Petitioner was not found.

17-Jan-22: Petitioner filed Revocation application. It was also rejected.

High Court held:
There no ground for respondent to believe that the petitioner was non-existent from the date of its registration.

There is no allegation that the petitioner had obtained its registration by means of fraud, wilful misstatement or suppression of facts.

He has also not filed the requisite information disclosing transfer of business to the firm.Thus, it is assumed that the petitioner was non-existent. 

However, record indicates that the petitioner was carrying on its business from its principal place of business in Delhi and had shifted it to Haryana.In these facts, the petitioner’s registration cannot be cancelled from the date he had obtained the same.

Petitioner cannot be denied the refund of accumulated ITC solely on the ground that he had not filed the necessary information regarding transfer of business and other returns to establish the transfer of stocks and capital goods more so when the petitioner’s claim for inverted tax structure as well as the accumulation of ITC has been verified by respondent.

The impugned orders cancelling the petitioner’s registration along with refund rejection order be set aside.

1. The petitioner has filed the present petition impugning an order dated 31.10.2022 passed by respondent no.3 [the Joint Commissioner, Central Goods and Service Tax (CGST), Appeals-I, Delhi – hereafter ‘the Appellate Authority’], whereby the petitioner’s appeal against an order dated 22.02.2022 passed by respondent no.2 [the Deputy Commissioner, Ward 71, CGST Delhi – hereafter ‘the Adjudicating Authority’], was rejected.

2. By the order dated 22.02.2022, respondent no.2 had rejected, the petitioner’s application seeking restoration of his Goods and Service Tax (GST) registration, which was canceled ab-initio.

3. The petitioner also impugns an order dated 09.03.2022 passed by respondent no.2, rejecting the petitioner’s claim for input tax credit (hereafter ‘ITC’) of ₹24,91,347/- (Twenty Four Lakh Ninety One Thousand Three Hundred And Forty Seven Rupees). The petitioner’s claim for refund of ITC was rejected because the petitioner was found to be non-existent and non-functional at the registered place of business.
The said order is also inextricably linked with the cancellation of the petitioner’s GST registration.

4. The petitioner is, essentially, aggrieved by the denial of ITC refund consequent to the cancellation of its GST registration.

Brief Facts
5. The petitioner is, inter alia, engaged in the business of manufacturing and supply of zipper fasteners, zipper sliders and other related products. The petitioner carries on his business under the name and style of his sole proprietorship concern named M/s A. S. Fastener. The said concern, with its principal place of business at Khasra No.80, Gali No.4, Samaypur Village, North West Delhi, Delhi, 110042, was registered under the Central Goods and Services Tax Act, 2017 (hereafter ‘the Act’) with effect from 02.07.2017 (bearing GST Registration No.07AGCPJ2410P2ZG).

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AJAY KUMAR JINDAL PROP. OF M/S A.S. FASTENER

For Reference Visit:
Delhi High Court

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GST Case Law