Case Summary: M/s. Golden Enterprises v. Assistant Commissioner, Trichy Road, Coimbatore, Tamil Nadu
Court: High Court of Judicature at Madras
Case No.: W.P. No. 5289 of 2025 & W.M.P. No. 5865 of 2025
Date of Judgment: 17 February 2025
Relevant Sections: Sections 29, 30, and 107 of the CGST Act, 2017; Rule 21 of the CGST Rules, 2017
Category: Registration – Cancellation and Restoration
Facts (Paras 1–4):
The petitioner, M/s. Golden Enterprises, a registered taxpayer under GST, regularly filed returns and paid taxes. The respondent issued a show-cause notice dated 06.11.2024, proposing cancellation of registration on the ground that no business was conducted at the declared premises. The registration was also suspended from the same date. The petitioner filed a reply on 13.11.2024, explaining that the business was closed temporarily for about fifteen days as the proprietor had travelled abroad during Deepavali holidays. Despite this, the respondent passed an order on 27.01.2025, cancelling the registration retrospectively from 01.07.2017, without properly appreciating the explanation.
Questions for Consideration:
Whether the GST registration could be cancelled merely because the premises was found closed during inspection, despite the taxpayer filing returns and paying taxes regularly.
Observations (Paras 7–8):
The Court observed that the petitioner had consistently filed GST returns and paid taxes. The temporary closure during festival holidays was a reasonable explanation, and the authority failed to verify the correctness of this before concluding that no business was carried on. The cancellation was therefore arbitrary and demonstrated non-application of mind. The Court found the petitioner’s explanation bona fide and genuine.
Judgment (Paras 8–10):
The Court set aside the cancellation order dated 27.01.2025 and directed restoration of GST registration. It issued detailed compliance directions:
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GST Network (GSTN) to restore the portal access within one week.
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Petitioner to file pending returns and pay due tax, interest, and late fee within four weeks.
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Payment must be made in cash, not through unverified ITC.
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ITC utilization to be allowed only after scrutiny and approval by the competent officer.
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Non-compliance with these directions would automatically revoke the relief.
Thus, the registration cancellation was held unsustainable in law, as mere closure during inspection could not imply cessation of business.
Between Fine Lines (Practical Takeaway):
Temporary non-operation of business, such as during holidays or staff absence, cannot justify GST registration cancellation if returns are filed and taxes are paid. Officers must verify facts and apply their mind before concluding that a taxpayer has ceased business. For traders, maintaining proof of business continuity (like returns, tax challans, and invoices) can safeguard against arbitrary cancellation.
Summary of Referred Cases (if any):
| S. No. | Case Title | Citation | Verdict / Ratio |
|---|---|---|---|
| 1 | — | — | No other case law cited. |
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
