Point of Law: Taxation - Business of providing goods - Absence of indication of grounds on which registration of petitioner was liable to be cancelled or alleged breaches committed by petitioner which was likely to lead to cancellation of the registration, action of Superintendent of Taxes failed minimum requirement of natural justice.

JUDGMENT :

Akil Kureshi, J.

The petitioner has challenged an order dated 23.04.2021 passed by the Superintendent of Taxes, Charge-IV, Tripura cancelling the petitioner’s registration under Tripura Goods and Services Tax Act as well as Central Goods and Services Tax Act.

2. Brief facts are as under:

The petitioner is a company registered under the Companies Act and is engaged in the business of providing goods on rental basis to its customers across the country including in the State of Tripura. In the State of Tripura the petitioner commenced its business in the year 2013-14. The petitioner was granted registration under CGST as well as State GST Acts. According to the petitioner whenever demand for any capital goods or machinery is received by the petitioner, the petitioner enters into a rental agreement with the customer and in terms and conditions thereof the petitioner would rent goods to the customer. The petitioner had purchased goods from M/S Reliance Retail Limited, Tripura (RRL, for short) for renting it back to RRL. According to the petitioner, the petitioner had obtained premises from one Rinku Dey on lease for its business purpose and for registration. Such lease was renewed from time to time. However, subsequently the petitioner was required to take new premises on lease. On 06.09.2020 the petitioner received a notice from the State GST Department. According to the petitioner, the petitioner had satisfied the queries raised in such communication under its letter dated 16.01.2021.

3. On 06.12.2020 the petitioner received a show-cause notice from the Superintendent of Taxes why the petitioner’s registration should not be cancelled. This notice reads as under :

“Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:

1 Non-compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed.

You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice.

You are hereby directed to appear before the undersigned on 15/12/2020 at 11:25.

If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.

Please note that your registration stands suspended with effect from 06/12/2020.” (emphasis supplied by us)

4. The petitioner replied to the said show-cause notice dated 06.12.2020 under a letter dated 16.01.2021 and stated as under:

“Respected Sir,

The above named Taxpayer acknowledges the receipt of SCN dated 06/12/2020 for cancellation of registration on the matter of non compliance of any specified provision in GST.

That it is pertinent to mention herein that the taxpayer is regular in paying their taxes and regular in filing their returns on time.

That it can be understood that matter of non-compliance is in connection with SCN u/s 61 of GST Act dated 06.09.2020 in the matter of clarification of excess ITC claimed as appeared in the differences in the GSTR3B and GSTR2A for the period Apr-2018 to Mar-19.

That, the matter relating to the same is being handled by Shri Nanda Dulal Pal, Advocate, Shri Nirnoy Paul, Advocate and Mr. Ninnaz Paul and a written submission in connection with the same along with additional supporting documents has been submitted today vide ASMT 11 bearing ARN No.ZD1601210003021 dated 16.01.2021.

That, the taxpayer assures full co-operation with the department and its procedures and that a written Compliance in Ref to SCN dated 06.09.2020 has been submitted and thus hereby pray before you to kindly revoke the SCN for cancellation of registration and allow taxpayer to run its course of business smoothly and file their returns on time and deposit applicable taxes and hope that your honour would be pleased to allow the same and drop the proceedings form your end otherwise the taxpayer wo