M S Bridgekala Luxurious Lifestyle Management Private Limited v. Commissioner of Delhi Goods and Services Tax and Another

1. Petitioner impugns order dated registration of the petitioner was cancelled from 11.01.2020 08.11.2022.

2. Vide Show Cause Notice dated called upon to show cause as to why the registration be not cancelled for the following reasons: IN THE HIGH COURT OF DELHI AT

NEW DELHI Date of decision 661/2024 & CM APPLs. 2992/2024, 2993/2024 M S BRIDGEKALA LUXURIOUS LIFESTYLE MANAGEMENT PRIVATE LIMITED versus COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND..... Responden Advocates who appeared in this case: Mr. Rakesh Kumar, Advocate. 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 27.02.2023, whereby the GST registration of the petitioner was cancelled retrospectively 11.01.2020 and also impugns Show Cause Notice dated Vide Show Cause Notice dated 08.11.2022, petitioner was for the following reasons:- IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 18.01.2024 661/2024 & CM APPLs. 2992/2024, 2993/2024 LIFESTYLE MANAGEMENT..... Petitioner COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND..... Respondents Rajeev Aggarwal, ASC with Mr. Prateek and Ms., whereby the GST retrospectively with effect Show Cause Notice dated, petitioner was “returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017

3. Subsequently, the impugned order of cancellation dated 08.11.2022 cited “Failure to furnish returns for a continuous period of six months

4. Learned counsel for the petitioner submits that petitioner could not file the returns on He submits that petitioner is aggrieved by the retrospective cancellation of registration with effect from 11.01.2020. He submits that registration sh 08.11.2022 i.e. the registration was suspended.

5. He submits that petitioner

6. We may note that though the Show Cause Notice states that petitioner failed to Services Tax Act, 2017.

7. The impugned order seeks to cancel the registration with effect from 11.01.2020 registration is sought to

8. 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 returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017” Subsequently, the impugned order of cancellation dated cited the following reason:- Failure to furnish returns for a continuous period of six months Learned counsel for the petitioner submits that petitioner could not file the returns on account of lapse on the part of the accountant. that registration should have been cancelled from the date of the date when the show cause notice was issued and the registration was suspended. He submits that petitioner would apply for fresh registration. We may note that though the Show Cause Notice states that failed to file returns under Section 39 of the Go Services Tax Act, 2017. The impugned order seeks to cancel the registration with effect 11.01.2020. 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 returns furnished by you under section 39 of the Central Goods Subsequently, the impugned order of cancellation dated Failure to furnish returns for a continuous period of six months” Learned counsel for the petitioner submits that petitioner could account of lapse on the part of the accountant. have been cancelled from the date of the date when the show cause notice was issued and apply for fresh registration. We may note that though the Show Cause Notice states that of the Goods and The impugned order seeks to cancel the registration with effect. There is no material on record to show as to why the he Show Cause Notice also does not put the petitioner retrospective cancellation of the registration.

9. 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 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, be 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.

10. It is importa 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. retrospective cancellation of the registration. In terms of Section 29(2) of the Central Goods and Services Tax 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 yer during such period. Although, we do not consider it apposite to required to consider this aspect while passing In terms of Section 29(2) of the Central Goods and Services Tax deem fit if the circumstances set out in the said sub-section are egistration cannot be cancelled with retrospective effect cause a taxpayer has not filed the nt to note that, according to the respondent, one of yer during such period. Although, we do not consider it apposite to required to consider this aspect while passing any order for