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HIGH COURT OF DELHI
,,,,,,,,,, W.P.(C) 16190 SHARDA METAL WORKS THROUGH ITS PROPRIETOR
MR.DILIP KUMAR THE COMMISSIONER CENTRAL GOODS AND SERVICES TAX
Advocates who appeared in this case:
For the Petitioner:
For the Respondent
JUDGMENT
1. Petitioner impugns order dated 02.05.2023 and Show Cause Notice dated 06.09.2022. Vide Show Cause Notice dated 06.09.2022, petitioner was called upon to show cause as to why the registration be not cancelled for the following reasons: “Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax.”
IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision SHARDA METAL WORKS THROUGH ITS PROPRIETOR MR.DILIP KUMAR versus THE COMMISSIONER CENTRAL GOODS AND SERVICES TAX..... Responden Advocates who appeared in this case: Mr. Rakesh Kumar & Mr. Subhash Advocates. For the Respondents: Mr. Akshay Amritanshu, Senior Standing Counsel with Ms. Anjali Kumar, Advocate. HON’BLE MR.
JUSTICE SANJEEV SACHDEVA HON'BLE MR.
JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL) Petitioner impugns order dated 02.05.2023 and Show Cause not cancelled for the following reasons:input tax credit or refund of tax.”
IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision: 04.01.2024 SHARDA METAL WORKS THROUGH ITS PROPRIETOR..... Petitioner..... Respondents Mr. Rakesh Kumar & Mr. Subhash Chandra Gupta, Mr. Akshay Amritanshu, Senior Standing Counsel with Petitioner impugns order dated 02.05.2023 and Show Cause
2. Vide impugned order dated 02.05.2023, the registration of the petitioner has been cancelled with effect from the date of its registration on 27.06.2018.
3. We may note that though the Show Cause Notice states that invoice or bill has been issued by the petit goods and/or services leading to wrongful availment or utilization of input tax credit or refund of tax. mentioned in the Show Cause Notice. invoice or bill which the making any supplies. It appears that the Show Cause Notice extracts the reason in a standard format as there are mentioned in the reason i.e. “without supply of goods and/or services” and “leading to wrongful availment or utilization of input tax credit or refund of tax”.
4. It appears that the respondents are using a template for issuing said notices without whether the petitioner has issu the action of the petitioner has led to wrongful availment or utilization of input tax credit or refund of tax.
5. Further, the Show Cause Notice also does not mention the quantum of wrongful availment of input tax cred claimed on the said account. The impugned order also does not state Vide impugned order dated 02.05.2023, the registration of the registration on 27.06.2018. We may note that though the Show Cause Notice states that invoice or bill has been issued by the petitioner without supply of input tax credit or refund of tax. No particulars or details have been tioned in the Show Cause Notice. There is no reference to any invoice or bill which the petitioner is alleged to have issued without the reason in a standard format as there are several other options “leading to wrongful availment or utilization of input tax credit or refund of tax”. It appears that the respondents are using a template for issuing without providing any particulars. There is no clarity as to whether the petitioner has issued invoices or bills without supply or of input tax credit or refund of tax. Further, the Show Cause Notice also does not mention the quantum of wrongful availment of input tax credit or any refund Vide impugned order dated 02.05.2023, the registration of the We may note that though the Show Cause Notice states that ioner without supply of particulars or details have been here is no reference to any petitioner is alleged to have issued without several other options “leading to wrongful availment or utilization of input tax It appears that the respondents are using a template for issuing providing any particulars. There is no clarity as to ed invoices or bills without supply or Further, the Show Cause Notice also does not mention the it or any refund any 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 bereft of any reasoning and particulars and are accordingly not sustainable.
6. The impugned order also seeks to cancel the registration with effect from 27.06.2018 why the registration no material to show that there was any wrongful availment or utilization of input tax credit effective from the date of registration till the issuance of the show cause notice.
7. In terms of Section 29(2) 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. The regi 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 n 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 important to note that, according to the respondent, one of received. Both the show cause notices and the impugned order are The impugned order also seeks to cancel the registration with 27.06.2018. There is no material on record to show as to why the registration is sought to be cancelled retrospectively. There is the issuance of the show cause notice. 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. The registration cannot be cancelled with retrospective effect some objective criteria. Merely, because a taxpayer has n It is important to note that, according to the respondent, one of and the impugned order are The impugned order also seeks to cancel the registration with. There is no material on record to show as to is sought to be cancelled retrospectively. There is of the Central Goods and Services Tax deem fit if the circumstances set out in the said sub-section are stration 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 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 where such consequences are intended and are warranted.
9. Further, t 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.
10. In view of the above, the Show impugned order are set aside.
11. 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 accordan with law and pursuant to a proper Show Cause Notice and an opportunity of hearing being given to the petitioner.
12. Respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the input tax credit availed in respect of the supplies made required to consider this aspect while passing any order for Further, the Show Cause Notice also does not put the petitioner retrospective cancellation of the registration. In view of the above, the Show Cause Notice as well as the impugned order are set aside. It would be, however, open to the respondent to take further action in accordance with law inter alia, cancellation of registration with retrospective effect. However, the same would be in accordan opportunity of hearing being given to the petitioner. espondents are also not precluded from taking any steps for input tax credit availed in respect of the supplies made by the tax hile passing any order for lso does not put the petitioner Cause Notice 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 espondents are also not precluded from taking any steps for petitioner in accordance with law.
13. The petition is accordingly disposed of in the above January 04, 2024 n accordance with law. The petition is accordingly disposed of in the above SANJEEV SACHDEVA, J RAVINDER DUDEJA, 2024/rm The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J RAVINDER DUDEJA, J