Full Text
HIGH COURT OF DELHI
,,,,,,,,,, W.P.(C) 295/2024 M/S SHREYA INTERNATIONAL
PRINCIPAL COMMISSIONER, DEPARTMENT OF TRADE AND
TAXES & ANR.
Advocates who appeared in this case:
For the Petitioner:
For the Respondent
JUDGMENT
1. Petitioner impugns order dated registration of the petitioner was cancelled from 10.07.2017 19.10.2021. Vide Show Cause Notice dated called upon to show cause as to why the re for the following reasons: “non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision 295/2024 M/S SHREYA INTERNATIONAL versus PRINCIPAL COMMISSIONER, DEPARTMENT OF TRADE AND TAXES & ANR...... Responden Advocates who appeared in this case: Mr. A.K. Prasad, Advocate. 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 04.11.2021, whereby the GST registration of the petitioner was cancelled retrospectively from 10.07.2017 and also impugns Show Cause Notice dated. Vide Show Cause Notice dated 19.10.2021 called upon to show cause as to why the registration be not cancelled for the following reasons:non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed”
IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision: 18.01.2024..... Petitioner PRINCIPAL COMMISSIONER, DEPARTMENT OF TRADE AND..... Respondents Rajeev Aggarwal, ASC with Mr. Prateek and Ms. whereby the GST retrospectively with effect Show Cause Notice dated 19.10.2021, petitioner was gistration be not cancelled non compliance of any specified provisions in the GST Act or
2. Subsequently, the impugned order of cancellation dated 04.11.2021 was passed citing the “Response not received”
3. We may note that though the Show Cause Notice states that “non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed mention which specific provisions have not been complied with
4. The impugned order also seeks to cancel the registration with retrospective effect from show as to why the registration is sought to retrospectively.
5. 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
6. Therefore, b are bereft of any reasoning and particulars and are accordingly not sustainable.
7. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper offic 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 Subsequently, the impugned order of cancellation dated 04.11.2021 was passed citing the following reason:- “Response not received” We may note that though the Show Cause Notice states that non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed”, however, it fail mention which specific provisions have not been complied with The impugned order also seeks to cancel the registration with effect from 10.07.2017. There is no material on record to show as to why the registration is sought to he Show Cause Notice also does not put the petitioner retrospective cancellation of the registration. Therefore, both the show cause notices and the impugned order 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 deem fit if the circumstances set out in the said sub egistration cannot be cancelled with retrospective effect Subsequently, the impugned order of cancellation dated We may note that though the Show Cause Notice states that non compliance of any specified provisions in the GST Act or the owever, it fail to mention which specific provisions have not been complied with. The impugned order also seeks to cancel the registration with. There is no material on record to show as to why the registration is sought to be cancelled he Show Cause Notice also does not put the petitioner oth the show cause notices and the impugned order In terms of Section 29(2) of the Central Goods and Services Tax er may cancel the GST registration of a deem fit if the circumstances set out in the said sub-section are egistration 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, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’ 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 important to note that, according to the respondent, one of the consequences for cancelling a tax 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 this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for 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 Petitioner shall file
10. It would be, however, open to the respondent to take further action in accordance with law with retrospective effect. However, the same would be in accordance It can be cancelled only if the proper officer deems it fit returns for some period does not mean that the taxpayer’ It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer’s registration with examine this aspect but assuming that the respondent’s contention in s registration can be cancelled with retrospective effect only In view of the above, the Show Cause Notice as well as the rder are set aside and the registration is restored file the requisite returns upto date. It would be, however, open to the respondent to take further action in accordance with law inter alia, cancellation of registration It can be cancelled only if the proper officer deems it fit returns for some period does not mean that the taxpayer’s registration It is important to note that, according to the respondent, one of payer’s registration with assuming that the respondent’s contention in s registration can be cancelled with retrospective effect only tice as well as the and the registration is restored. It would be, however, open to the respondent to take further, cancellation of registration with law and p opportunity of hearing being given to the petitioner.
11. 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
12. The petition is accordingly disposed of in the above January 18, 2024 with law and pursuant to a proper Show Cause Notice and an opportunity of hearing being given to the petitioner. espondents are also not precluded from taking any steps for in accordance with law. The petition is accordingly disposed of in the above SANJEEV SACHDEVA, J RAVINDER DUDEJA, 2024/vp ursuant to a proper Show Cause Notice and an espondents are also not precluded from taking any steps for The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J RAVINDER DUDEJA, J