Physical Verification of Premises for GST Registration Granted Without Notice Violates Natural Justice Principles: Delhi High Court

In a landmark decision, the Delhi High Court ruled that the physical inspection of company premises without notice for the purpose of issuing GST registration is unconstitutional since it violates the principles of natural justice.

The department revoked the GST registration of the petitioner, M/s Curil Tradex Pvt Ltd, based on the show cause notice, which cited a letter from the Deputy Commissioner (DC) of the CGST – Delhi South Commissionerate. The respondents/department stopped the petitioner’s registration as of the date of the issue of the notice to show reason.

The petitioner argued that if the appropriate officer decided for a physical inspection of the petitioner’s business location, it may only be conducted in the presence of the petitioner’s authorised representative. In other words, a previous notice or intimation would need to be delivered in this scenario by the appropriate authority.

The division bench of Justice Rajeev Shakdher and Justice Taravitasta Ganju stated, “A careful reading of the rule reveals that if, after the grant of registration, the proper officer is convinced that physical verification of the place of business of the concerned person is necessary, the proper officer may get such verification of the business place carried out, albeit in the presence of the concerned person, and then, have the verification report along with other relevant documents filed with the Registrar.”

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