2026-VIL-944-GUJ
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SGST High Court Cases

GST - Cancellation of Registration - Declaration of Nil Turnover for specific location - Burden of Proof for Discontinuance of Business - Petitioner declared nil turnover in GSTR 3B returns for period 01.04.2021 to 31.03.2024 as no business turnover was undertaken from that location though petitioner had business activities and turnover from other locations - Respondent authority issued Show Cause Notice proposing to cancel the registration as turnover in GSTR 3B was shown ‘nil’ - Without awaiting reply to SCN, authority suspended registration and cancelled registration order observing that petitioner had shown nil turnover during period and therefore had closed business - Whether mere declaration of nil turnover in returns for specific location suffices to cancel registration - HELD – An obligation is cast upon Proper Officer to arrive at conclusion that business has been discontinued based on cogent and tangible evidence. Mere declaration of ‘nil’ turnover cannot be construed that petitioner had discontinued business – The Section 29 of the CGST Act contemplates that Proper Officer may cancel registration having regard to circumstances where business has been discontinued, transferred fully, amalgamated or demerged or where there is change in constitution of business or where taxable person is no longer liable to be registered - Mere fact that petitioner declared nil turnover in GSTR 3B returns for specific location does not fall within circumstances prescribed under which notice under Section 29(1) can be issued for cancellation - Petitioner produced requisite evidence to show that business was being carried on from registered premises. Respondent authority cancelled registration without verification of factual aspect that petitioner had stopped business merely on premise that petitioner failed to furnish reply to SCN – The proceedings initiated against petitioner by impugned orders is quashed and set aside. However, liberty is reserved in favour of respondent authority to verify whether petitioner's business has continued or not and act in accordance with law - The petition is allowed
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