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HIGH COURT OF DELHI
INDOTECH MAGNETICS
ANR.
Advocates who appeared in this case:
For the Petitioner:
For the Respondent
JUDGMENT
1. Issue notice.
2. Mr. Aggarwal, learned counsel appearing for the respondents accept notice.
3. Petitioner has filed the present petition impugning an order dated 11.10.2023 (hereafter the impugned order), whereby the petitioner’s GST registration was cancelled with retro
4. Petitioner was registered with the GST authority with effect from 16.07.2023. The petitioner claims that he was carrying on the business IN THE HIGH COURT OF DELHI AT
NEW DELHI Date of decision: 03.01.2024 W.P.(C) 16380/2023 & CM APPL. 65948/2023 INDOTECH MAGNETICS..... Petitioner versus..... Respondent Advocates who appeared in this case: Mr. Rajesh Mahna, Mr. Ramanand Roy & Mr. Mayank Kouts, Advocates. Respondents: Mr. Rajeev Aggarwal with Ms. Samridhi Vats, HON’BLE MR.
JUSTICE SANJEEV SACHDEVA HON'BLE MR.
JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL) Issue notice. Mr. Aggarwal, learned counsel appearing for the respondents Petitioner has filed the present petition impugning an order dated registration was cancelled with retrospective effect. Petitioner was registered with the GST authority with effect from IN THE HIGH COURT OF DELHI AT NEW DELHI 03.01.2024. CM APPL. 65948/2023..... Petitioner..... Respondents Mr. Rajesh Mahna, Mr. Ramanand Roy & Mr. Mayank Mr. Rajeev Aggarwal with Ms. Samridhi Vats, Advocates SANJEEV SACHDEVA Mr. Aggarwal, learned counsel appearing for the respondents Petitioner has filed the present petition impugning an order dated Petitioner was registered with the GST authority with effect from under the name of ‘M/s Indotec Magnetics’ and was assigned Goods and Service Tax Identification N Petitioner claims that they discontinued the business w.e.f. 01.04.2020 and filed an application dated 29.05.2020 praying that the GST registration be cancelled with effect from the said date. Respondent did not act on the sa the concerned officer of GST department issued a notice on the ground that no return had been filed for over six months
5. The proper officer issued a show cause notice dated 11.01.2022 (hereafter ‘the SCN registration for the following reasons:
6. Petitioner was called upon to respond to the of seven working days and to appear before the concerned officer for personal hearing “on the appointed date and time”, failing which the petitioner was cautioned that their case would be decided Additionally, the petitioner’ from the date of the SCN, i.e. 11.01.2022.
7. Thereafter, the proper officer passed the impugned order cancelling the petitioner’s GST registration with retrospective effect from 01.07.2017. The impugned order cancelling the petitioner’s GST registration except mentioning that no reply has been received to the SCN. Service Tax Identification Number (GSTIN) 07AAAFI8460N1ZZ. not act on the said request for over one year. However, on 11.01.2022, that no return had been filed for over six months The proper officer issued a show cause notice dated 11.01.2022 e SCN’), proposing to cancel the petitioner’s GST registration for the following reasons: - Any Taxpayer other than composition taxpayer has months”. Petitioner was called upon to respond to the SCN within a period petitioner was cautioned that their case would be decided Additionally, the petitioner’s GST registration was suspended with effect from the date of the SCN, i.e. 11.01.2022. 01.07.2017. The impugned order does not indicate any reason for reply has been received to the SCN. umber (GSTIN) 07AAAFI8460N1ZZ. id request for over one year. However, on 11.01.2022, The proper officer issued a show cause notice dated 11.01.2022 ), proposing to cancel the petitioner’s GST Any Taxpayer other than composition taxpayer has SCN within a period petitioner was cautioned that their case would be decided ex-parte. s GST registration was suspended with effect does not indicate any reason for
8. 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 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, because a taxpayer has not filed the 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.
9. 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 by t 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 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.
10. In the present case, the petiti business w.e.f 01.04.2020. Thus, not filing returns, thereafter, cannot be a ground to cancel the registration in respect of the period while In terms of Section 29(2) of the Central Goods and Services Tax circumstances set out in the said sub-section are satisfied. The, because a taxpayer has not filed the returns for some returns were filed and the taxpayer was compliant. s important to note that, according to the respondent, one of the availed in respect of the supplies made by the tax payer during such passing any order for cancellation of GST registration with In the present case, the petitioner had indicated that she closed the In terms of Section 29(2) of the Central Goods and Services Tax on are satisfied. The, because a taxpayer has not filed the returns for some s important to note that, according to the respondent, one of the he tax payer during such passing any order for cancellation of GST registration with oner had indicated that she closed the petitioner was carrying on the business in compliance with the provisions of the law.
11. As noted above, the SCN proposing to cancel the petitioner’s GST registration is flawed. The impugned order cancelling the petitioner’s GST registration is also liable to be set aside as it is bereft of any reason. It neither specifies the gives any clue as to why it was cancelled with retrospective effect.
12. In view of the above, we consider it apposite to allow the present petition and direct that the cancellation of the petitioner’s GST registration shall take effect from 29.05.2020, being the date of the application filed by the petitioner seeking cancellation of the GST registration.
13. It is clarified that this order would not preclude the respondent from initiating any steps in acco petitioner had violated any provisions of the Act prior to 29.05.2020.
14. The petition is allowed in the aforesaid terms. All pending applications are also disposed of. January 03, 2024/ As noted above, the SCN proposing to cancel the petitioner’s GST It neither specifies the reason for cancelling the GST registration nor In view of the above, we consider it apposite to allow the present initiating any steps in accordance with law, if it is found that the applications are also disposed of.
SANJEEV SACHDEVA, J January 03, 2024/sk RAVINDER DUDEJA As noted above, the SCN proposing to cancel the petitioner’s GST reason for cancelling the GST registration nor In view of the above, we consider it apposite to allow the present rdance with law, if it is found that the SANJEEV SACHDEVA, J RAVINDER DUDEJA, J