PANKAJ PLASTIC v. COMMISSIONER OF DELHI GOODS AND SERVICES TAX

1. Petitioner impugns order dated Notice dated 09.12 petitioner was called upon to show cause as to why the registration be not cancelled for the “returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017

2. Vide impugned order dated petitioner has been cancelled with effect from the date of its IN THE HIGH COURT OF DELHI AT

NEW DELHI Date of decision 402/2024 & CM APPLs. 1819/2024, 1820/2024 PANKAJ PLASTIC versus COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND..... Responden Advocates who appeared in this case: Mr. Rakesh Kumar & Mr. Praveen Kumar For the Respondents: Mr. Rajeev Aggarwal, ASC with Mr. Prateek and Ms. Samridhi, Advocates. HON’BLE MR.

JUSTICE SANJEEV SACHDEVA HON'BLE MR.

JUSTICE RAVINDER DUDEJA

JUDGMENT

SANJEEV SACHDEVA, J. (ORAL) Petitioner impugns order dated 23.11.2022 and Show Cause 09.12.2022. Vide Show Cause Notice dated not cancelled for the following reasons:returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017” Vide impugned order dated 23.11.2022, the registration of the IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 11.01.2024 402/2024 & CM APPLs. 1819/2024, 1820/2024..... Petitioner COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND..... Respondents Praveen Kumar, Advocates. Rajeev Aggarwal, ASC with Mr. Prateek and Ms. and Show Cause.2022. Vide Show Cause Notice dated 09.12.2022, returns furnished by you under section 39 of the Central Goods, the registration of the registration on 01.07.2017

3. We may note that though the Show Cause Notice states that petitioner failed to furnish returns for a continuous period of six months. No particulars or details have been men Cause Notice. It appears that the Show Cause Notice reason in a standard format.

4. Further, the Show Cause Notice also does not mention the quantum of returns reasons for cancellation of the GST registration retrospectively except to state that no reply to the show cause notice has been received. Both the show cause notices and the impugned order are bereft of any reasoning and particulars and are accordingly not sustainable.

5. The impugned order also seeks to cancel the registration with effect from 01.07.2017 why the registration is sought to

6. Further, the Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration.

7. 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 01.07.2017. We may note that though the Show Cause Notice states that particulars or details have been mentioned in the Show It appears that the Show Cause Notice reason in a standard format. Further, the Show Cause Notice also does not mention the returns. The impugned order also does not state any soning and particulars and are accordingly not sustainable. The impugned order also seeks to cancel the registration with 01.07.2017. There is no material on record to show as to why the registration is sought to be cancelled retrospectively. he Show Cause Notice also does not put the petitioner retrospective cancellation of the registration. In terms of Section 29(2) of the Central Goods and Services Tax We may note that though the Show Cause Notice states that tioned in the Show It appears that the Show Cause Notice extracts the Further, the Show Cause Notice also does not mention the. The impugned order also does not state any soning and particulars and are accordingly not sustainable. The impugned order also seeks to cancel the registration with. There is no material on record to show as to be cancelled retrospectively. he Show Cause Notice also does not put the petitioner In terms of Section 29(2) of the Central Goods and Services Tax deem fit if the circumstances set out in the said sub satisfied. Registration cannot be cancelled with retrospective effect 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, b returns for some period does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.

8. It is import 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 by the tax 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 while passing cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.

9. In view of the above, the Show Cause No Impugned Order are set aside.

10. It would be, however, open to the respondent to take further action in accordance with law deem fit if the circumstances set out in the said sub egistration cannot be cancelled with retrospective effect some objective criteria. Merely, because a taxpayer has not filed the It is important to note that, according to the respondent, one of ayer during such period. Although, we do not consider it apposite to required to consider this aspect while passing In view of the above, the Show Cause Notice a rder are set aside. It would be, however, open to the respondent to take further action in accordance with law inter alia, cancellation of registration deem fit if the circumstances set out in the said sub-section are egistration cannot be cancelled with retrospective effect ecause a taxpayer has not filed the ant to note that, according to the respondent, one of ayer during such period. Although, we do not consider it apposite to any order for tice as well as the It would be, however, open to the respondent to take further, cancellation of registration with retrospective effect. However, the same would be in accordance with law and pursuant to a proper Show Cause Notice and an opportunity of hearing being given to the petitioner.