Full Text
HIGH COURT OF DELHI
,,,,,,,,,, W.P.(C) 611 PREM ENTERPRISES COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND
SERVICES TAX & ANR.
Advocates who appeared in this case:
For the Petitioner:
For the Respondent:
JUDGMENT
1. Petitioner the appeal filed by the petitioner has been dismissed solely on the ground of limitation.
2. Petitioner filed the appeal impugning order of cancellation of registration dated 08.07.2021 whereby Petitioner was cancelled retrospectiv Petitioner also impugns order dated 05.11.2020 and 28.06.2021, whereby the application for cancellation of GST registration was IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision: 611/2024 & CM APPL. 2708/2024 PREM ENTERPRISES versus COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND SERVICES TAX & ANR....... Advocates who appeared in this case: Mr. Rajesh Mahna, Mr. Ramanand Roy, Mr. Mayank Kouts and Mr. Shiva Narang, Advocates. For the Respondent: Mr. Rajeev Aggarwal, ASC with Ms. Samridhi Vats, Advocate. HON’BLE MR.
JUSTICE SANJEEV SACHDEVA HON'BLE MR.
JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL) etitioner impugns Order in Appeal dated 18.04.2023 whereby ground of limitation. Petitioner filed the appeal impugning order of cancellation of dated 08.07.2021 whereby the GST registration of the Petitioner was cancelled retrospectively with effect from 10.07.2017 IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 24.01.2024.... Petitioner COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND...... Respondents ajesh Mahna, Mr. Ramanand Roy, Mr. Mayank Kouts and Mr. Shiva Narang, Advocates. Mr. Rajeev Aggarwal, ASC with Ms. Samridhi Vats, ppeal dated 18.04.2023 whereby Petitioner filed the appeal impugning order of cancellation of the GST registration of the ely with effect from 10.07.2017 rejected. Petitioner 29.06.2021.
3. Vide Show Cause Notice called upon to show cause as to why the registration be not cancelled for the following reasons: “Any taxpayer other than composition taxpayer has not filed returns for a continuous period of six months”
4. Petitioner and trading of Sanitary Goods Services Tax Act cancelled by order dated 08.07.2021 retrospectively with effect from 10.07.2017.
5. Petitioner claims to have and applied for cancellation of GST registration.
6. Petitioner was details by notice dated 16.09.2020, H letter dated 16.09.2020 did not require details and as such, no details could be furnished.
7. Application for cancellation was rejected on 05.11.2020. Thereafter, the petitioner once again applied for cancellation on 22.12.2020, in response to which, a notice dated 26.03.2021 was received, requiring the petitioner to furnish further details. Howe Petitioner also impugns Show Cause Notice dated Vide Show Cause Notice dated 29.06.2021, petitioner was for the following reasons:returns for a continuous period of six months” Petitioner, a Partnership Firm was in business of Manufacturing and trading of Sanitary Goods and was registered under Goods and Services Tax Act, 2017. GST registration of the petitioner was Petitioner claims to have shut the business of w.e.f 30.06.2020 and applied for cancellation of GST registration. Petitioner was called upon by the respondents to furnish certain ls by notice dated 16.09.2020, However, as per the petitioner,.09.2020 did not require the petitioner to furnish any details and as such, no details could be furnished. pplication for cancellation was rejected on 05.11.2020. received, requiring the petitioner to furnish further details. Howe Show Cause Notice dated dated 29.06.2021, petitioner was a Partnership Firm was in business of Manufacturing and was registered under Goods and GST registration of the petitioner was shut the business of w.e.f 30.06.2020 to furnish certain owever, as per the petitioner, the petitioner to furnish any pplication for cancellation was rejected on 05.11.2020. received, requiring the petitioner to furnish further details. However, the same was not provided and as such, the application was once again rejected. Petitioner, thereaft Authority, which appeal has also been dismissed by order dated 18.04.2023.
8. It may be noticed that issued to the petitioner does not specify any cogent reason, there is an observation in the notice stating “failure to furnish returns for a continuous period of six months”.
9. Further, the impugned order states that the registration is liable to be cancelled for the following reason “whereas no reply to notice to show cause has been submitted”. It seeks to cancel the registration with retrospective effect from 10.07.2017. There is no material on r registration is sought to be cancelled retrospectively.
10. The Show Cause Notice dated petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, petitioner object to the retrospective cancellation of the registration.
11. Records clearly demonstrate that the Petitioner had submitted an application seeking cancellation of the GST registration on 25.07.2020 and 22 08.07.2021, the registration of the Petitioner had been cancelled. We etitioner, thereafter, filed an appeal before the Appellate uthority, which appeal has also been dismissed by order dated It may be noticed that the show cause notice dated 29.06.2021 continuous period of six months”. Further, the impugned order of cancellation dated whereas no reply to notice to show cause has been It seeks to cancel the registration with retrospective effect.07.2017. There is no material on record to show as to why the registration is sought to be cancelled retrospectively. he Show Cause Notice dated 29.06.2021 also does not put the retrospectively. Accordingly, petitioner had no opportunity to even Records clearly demonstrate that the Petitioner had submitted 25.07.2020 and 22.12.2020 and thereafter, vide order dated, the registration of the Petitioner had been cancelled. We er, filed an appeal before the Appellate uthority, which appeal has also been dismissed by order dated dated 29.06.2021 dated 08.07.2021 whereas no reply to notice to show cause has been It seeks to cancel the registration with retrospective effect ecord to show as to why the also does not put the had no opportunity to even Records clearly demonstrate that the Petitioner had submitted and thereafter, vide order dated, the registration of the Petitioner had been cancelled. We note that the cancellation of registration has been done with retrospective effect.
12. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub satisfied. Registration cannot be cancelled with retrospect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does no is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
13. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect w cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only retrospective effect. In terms of Section 29(2) of the Central Goods and Services Tax t, 2017, the proper officer may cancel the GST registration of a deem fit if the circumstances set out in the said sub satisfied. Registration cannot be cancelled with retrospect returns for some period does not mean that the taxpayer’s registration It is important to note that, according to the respondent, one of input tax credit availed in respect of the supplies made required to consider this aspect while passing any order for In terms of Section 29(2) of the Central Goods and Services Tax t, 2017, the proper officer may cancel the GST registration of a deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect t mean that the taxpayer’s registration It is important to note that, according to the respondent, one of input tax credit availed in respect of the supplies made by the tax hile passing any order for where such consequences are intended and are warranted
14. In view of the above, facts and cancellation is modified to the extent that the same shall operate with effect from 30.06.2020, i.e., the date on which the petitioner discontinued the business.
15. However, the petitioner shall furnish all requisite details to th respondents as required to be submitted by the petitioner dated 26.03.2021 is liable to be raised against the petitioner for the periods both prior and post 30.06.2020.
16. It is clarified that taking any steps for be due from the petitioner in accordance with law.
17. Petition is accordingly disposed of in the above terms January 24, 2024 where such consequences are intended and are warranted In view of the above, facts and circumstances, discontinued the business. However, the petitioner shall furnish all requisite details to th respondents as required to be submitted by the petitioner 26.03.2021 to enable the respondents to ascertain if any to be raised against the petitioner for the periods both prior and post 30.06.2020. It is clarified that respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the petitioner in accordance with law. etition is accordingly disposed of in the above terms SANJEEV SACHDEVA, J RAVINDER DUDEJA, 2024/vp where such consequences are intended and are warranted. circumstances, the order of However, the petitioner shall furnish all requisite details to the respondents as required to be submitted by the petitioner by letter to enable the respondents to ascertain if any demand to be raised against the petitioner for the periods both prior respondents are also not precluded from recovery of any tax, penalty or interest that may etition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J RAVINDER DUDEJA, J