Cancellation of GST Registration Upheld: Non-Conduct of Business from Declared Premises Valid Ground

Issue

Whether the High Court should interfere with the concurrent findings of the Proper Officer and the Appellate Authority cancelling a GST registration on the ground that the assessee was not conducting business from the declared place of business, especially when documentary evidence (rental agreements) raised doubts about the genuineness of the premises.

Facts

The Action: The Proper Officer cancelled the petitioner’s GST registration vide FORM GST REG-19.
The Reason: The cancellation was invoked under Section 29 of the CGST Act on the specific ground that the assessee was not conducting any business from the declared place of business, which is a contravention of Rule 21(a) of the CGST Rules.
Appellate Order: The petitioner filed a statutory appeal. The Appellate Authority affirmed the cancellation order, holding that the proper officer had acted in accordance with the law and that the petitioner failed to prove their physical presence at the registered address.
Discrepancy: During the proceedings, serious doubts emerged regarding the tenancy. Specifically, two rental agreements bearing different dates were produced for the same/related premises, creating ambiguity about the actual place of business.
Writ Petition: The petitioner challenged the appellate order in the High Court.

Decision

The Telangana High Court dismissed the writ petition and ruled in favour of the Revenue.
Unimpeachable Findings: The Court observed that the findings of the Appellate Authority were “unimpeachable” (beyond question). The authority had correctly identified that the petitioner failed to establish their presence at the declared address.
Contravention of Rule 21: The Court held that the non-conduct of business from the declared place constitutes a clear violation of Rule 21(a), which makes the registration liable for cancellation.
Dubious Documents: The existence of conflicting rental agreements with different dates undermined the petitioner’s claim and justified the authorities’ skepticism regarding the declared premises.
No Interference: Finding no legal error or perversity in the lower authorities’ orders, the High Court refused to interfere under its writ jurisdiction.

Key Takeaways

Physical Presence is Mandatory: Merely holding a registration certificate is insufficient. A taxpayer must physically operate from the “declared place of business.” If a field visit (Rule 25) finds the premises empty or occupied by someone else, cancellation is the standard outcome.
Documentary Credibility: Submitting inconsistent or contradictory documents (like multiple rent agreements for the same period) weakens the taxpayer’s case significantly and is often viewed as an attempt to cover up the lack of a genuine workplace.
Writ Jurisdiction Limits: High Courts typically do not act as a second court of appeal on questions of fact. If the Appellate Authority’s factual findings (that business was not being conducted) are reasonable and based on evidence, the High Court will not disturb them.

HIGH COURT OF TELANGANA

M A Enterprises

Additional Commissioner Appeals1^*

Aparesh Kumar Singh, CJ.
and G.M. MOHIUDDIN, J.

WP No. 27283 of 2025

OCTOBER 7, 2025

Venkatram Reddy Mantur, Adv. for the Petitioner. Dominic Fernandes, Sr. Standing Counsel for the Respondent.

ORDER

1. Heard Mr. M. Venkatram Reddy, learned counsel for the petitioner and Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appearing for the respondents.

2. Petitioner’s GST registration No.36CAPPM 6663N1ZR was cancelled with effect from 31.01.2025, vide Form GST REG-19 dated 11.04.2025, under Rule 22(3) of the Central Goods and Services Tax Rules, 2017 (for short ‘the Rules’), inter alia on number of grounds including the one that the petitioner has not been conducting any business from his declared place of business. Petitioner preferred an appeal. The appellate authority called for a report from the jurisdictional Superintendent. The jurisdictional Assistant Commissioner of Central Tax, Shamshabad GST Division, replied as follows:

“In this regard, it is informed that DGGI, Vizag who have booked a offence case the said unit, vide letter F. No. DGGI/ INV/GST/509/2025-Gr.A-0/o. ADG-GGI, dated 20.05.2025 opined that the prayer of the taxpayer does not merit for consideration. The relevant contents of the said letter are reproduced hereunder.

‘3. In this regard, it is informed that as per the Inspection Authorization No. 297/2024-25 dated 14.03.2025 issued by the Joint Director, DGGI, VZU for inspection of the business premises of M/s. MA Enterprises (GSTIN: 36CAPPM6663N1ZR) i.e., Second Floor, Plot No.28 EP, Krishnaveni Nagar, Saroor Nagar Main Road, Hyderabad, Rangareddy, Telangana, 500035, the inspection officers of DGGI, VZU visited the said premises on 18.03.2025. On reaching the premises, it was found that there was no business entity by name M/s. MA Enterprises or any person by name Shri Mohammad Abdul Rahman at the said premises.

Enquiry made with the people living near the premises revealed that M/s. MA Enterprises or any person with name Shri Mohammad Abdul Rahman have not conducted/conducting any business activity in the said premises. Subsequently, the inspection officers contacted Shri. Mohammad Abdul Rahman, Proprietor of M/s. MA Enterprises over phone at his mobile number 9642430487. But, Shri. Mohammad Abdul Rahman did not pick up the call. He never picked up the call despite repeated telephonic calls from the officers.

Subsequently, the officers approached the owner of the premises Ms. S. Shilpa Reddy, W/o Shri Depa Mahender Reddy and enquired her about the business activities of M/s. MA Enterprises in her premises i.e., Second Floor, Plot No 28 EP, Krishnaveni Nagar, Saroor Nagar Main Road, Hyderabad, Rangareddy, Telangana, 500035. In response, she stated that the aforesaid premises was owned by her; that one Hostel by name Elite Hostel for Men has taken the said premises on rent 8 years back and that still they are continuing in the said premises. Further, she stated that the premises was never rented out to any firm named M/s. MA Enterprises (36CAPPM6663N1ZR) or to any person named Shri Mohammad Abdul Rahman at any point of time and that no business/commercial activity is being carried out by the said firm in the said premises. She stated that the Rental Agreement dated 19.02.2024 said to be executed between her and Shri Mohammad Abdul Rahman is a fake document and the signature on the said Rental Agreement is different from her actual signature. Aforesaid proceedings were recorded under Panchanama dated 18.03.2025.

4. The non-existence of M/s. MA Enterprises (36CAPPM6663N1ZR) has been substantiated by the Panchanama dated 18.03.2025 drawn at the declared place of business.

5. As M/S. MA Enterprises (36CAPPM6663N1ZR) was found to be a fake/bogus entity which obtained GST registration fraudulently by uploading/submitting a fake rental agreement, this office vide letter dated 20.03.2025 requested the Jurisdictional AC to cause cancellation of the GST Registration of M/s. MA Enterprises (36CAPPM6663N1ZR) as per the provisions of Section 29 of CGST Act, 2017 read with Rule 21 of the CGST Rules, 2017 and to block the ITC ledger of the said entity under Rule 86A of CGST Rules, 2017, in order to prevent them from further passing on fraudulent ITC to other taxpayers.

6. Subsequently, the Superintendent, Saroor Nagar CGST Range issued Show Cause Notice to the subject taxpayer on 28.03.2025 and the registration was cancelled on 11.04.2025, after following procedures.

7. In this context, attention is invited to the Superintendent, Saroor Nagar CGST Range’s letter dated 09.05.2025 addressed to the Assistant Commissioner of Central Tax, Shamshabad CGST Division, wherein he has stated that he has verified premises of the taxpayer and the rental agreement, based on the amendment application vide ARN No. AA3603250288445 dated 18.03.2025; that the taxpayer is running business from the new premises; that the rental agreement between Shri Sriramula Anjaneyulu (new premises owner) and Shri Mohammed Abdul Rahman (Proprietor) was executed on 25.11.2024, but the taxpayer applied for amendment on 18.03.2025. Based on the above, the Superintendent, Saroor Nagar CGST Range vide the aforementioned letter, proposed for restoration of the suo-moto cancelled registration of the subject taxpayer, in the interest of taxpayer convenience.

8. In this regard, this is to bring to your notice that on verification of documents uploaded by the taxpayer in the BO portal, it is noticed that the taxpayer has applied for amendment on 18.03.2025 (i.e. exactly on the date of inspection of officers of DGGI, VZU) by uploading the Rental Agreement dated 18.03.2025 on the BO portal. However, no rental agreement dated 25.11.2024 said to be executed between Shri Sriramula Anjaneyulu (new premises owner) and Shri Mohammed Abdul Rahman (Proprietor) found to have uploaded on the portal by the taxpayer. The taxpayer has erred by furnishing two sets of rental agreements from the same owner i.e., Shri Sriramula Anjaneyulu, one dated 25.11.2024 (in physical mode to the Superintendent, Saroor Nagar Range) and another dated 18.03.2025 (on BO portal), which clearly indicate that the said rental agreements/documents are not genuine.

9. In this context, it is reiterated that the subject taxpayer had obtained GST Registration fraudulently by way of uploading fake documents in the portal and hence it is opined that the proposal of revocation of the cancelled GST registration of M/s. MA Enterprises (36CAPPM6663N1ZR) does not merit consideration.’

3. The appellate authority, upon consideration of the report of the jurisdictional Assistant Commissioner of Central Tax, Shamshabad GST Division, held that the cancellation of GST registration of the petitioner has been carried out in accordance with the provisions of Section 29 of the Act read with Rule 21 of the Rules after due process of law. He further held that the place of business declared by the petitioner at the time of grant of registration was found to be non-existent during physical verification on 18.03.2025, as evidenced by the panchanama drawn on the same date. The owner of the premises, Smt. S. Shilpa Reddy, has categorically denied renting the said premises to the petitioner at any point of time and disputed the authenticity of the rental agreement relied upon by the petitioner, stating the same to be a forged document. Further, the petitioner is held to have furnished inconsistent and contradictory documents in respect of the alleged new premises i.e., one rental agreement dated 25.11.2024, given in physical mode to the Superintendent and another one dated 18.03.2025, uploaded to the BO portal, which raise serious doubts over the genuineness of the same. He further opined that the amendment application for change of address was filed only on 18.03.2025, the day on which inspection was conducted by DGGI officers. The petitioner has failed to produce credible evidence to rebut the findings of nonexistence of declared place of business at the material time or to establish that the GST registration was obtained and operated in a bona fide manner. Therefore, he refused to interfere with the cancellation of the petitioner’s GST registration. Being aggrieved, the present Writ Petition has been filed by the petitioner inter alia on the grounds that the impugned order of cancellation of its registration is arbitrary and violative of the principles of natural justice. It has been passed contrary to the third proviso to sub-section (2) of Section 29 of the Act. Cancellation of registration made with retrospective effect from 28.03.2025 is not justified. The impugned order cancelling the GST registration of the petitioner has been passed merely on surmises and conjectures. The appellate authority has rejected the appeal without appreciating the grounds of appeal. The appellate authority has ignored the documents relating to the petitioner’s business activities and the physical verification report of respondent No.2, who physically confirmed the business activity of the petitioner, verified its bank statements, invoices and took samples. Therefore, the impugned order of cancellation of GST registration of the petitioner is liable to be set aside.

4. Learned Senior Standing Counsel for CBIC has drawn the attention of this Court to the findings of the appellate authority quoted above. He submits that the owner of the previous premises, against which registration was obtained, has denied renting the premises to the petitioner at any point of time and has stated that the rental agreement is a forged document. It is submitted that even the amendment application moved for change of the place of business was filed on the same date i.e., 18.03.2025, on which the inspection was carried out by DGGI officials. Moreover, petitioner had furnished two sets of rental agreements of the same premises, one dated 25.11.2024 given in physical mode to the Superintendent and another one dated 18.03.2025, uploaded to the BO portal, which raise serious doubts about the genuineness of the same. The cancellation of GST registration was made also on the ground that the petitioner has not been conducting business from the declared place of business. The appellate authority, having considered the report of the jurisdictional Assistant Commissioner of Central Tax, Shamshabad GST Division, found that there are serious doubts about the GST registration of the petitioner. For the aforesaid reasons, the appellate authority refused to interfere with the order of cancellation of petitioner’s GST registration dated 11.04.2025.

5. We have considered the submissions of learned counsel for the parties and taken note of the materials placed on record.

6. The findings of the learned appellate authority appear to be unimpeachable as there are serious doubts as to the place of business against the earlier premises alleged to have been declared by the petitioner at the time of grant of registration and also against the new premises in respect of which the petitioner itself has furnished two rental agreements of two different dates 25.11.2024 and 18.03.2025.

7. The cancellation of GST registration of the petitioner has also been made on the ground that petitioner has not conducted any business from the declared place of business, which is in contravention of Rule 21A of the Rules.

8. In view of the aforesaid reasons, we do not find any ground to interfere with the impugned order of cancellation of GST registration of the petitioner as confirmed in the appeal.

9. Therefore, the instant Writ Petition is dismissed. No costs.

10. As a sequel, miscellaneous petitions, pending if any, stand closed.