Rasi Innovation Pvt Ltd v. Superintendent, Ward 84, Delhi GST & Anr.

1. This hearing has been done through hybrid mode. CM APPL. 30348/2025(for exemption)

2. Allowed, subject to all just exceptions. Application is disposed of.

3. The present petition has been filed by Petitioner – Rasi Innovation Pvt. Ltd. under Article 226 & 227 of the Constitution of India challenging the order dated 23rd May, 2024 (hereinafter, ‘the impugned order’) by which the Goods and Service Tax Registration (hereinafter, ‘GST Registration’) of the Petitioner has been cancelled with retrospective effect from 10th May 2018.

4. The Petitioner was issued a show cause notice dated 10th March, 2023 (hereinafter, ‘the SCN’) in respect to the cancellation of its GST Registration. However, no reply was filed by the Petitioner to the SCN.

5. The case of the Petitioner, as per Mr. Rai, ld. Counsel for the Petitioner is that the GST registration was obtained by the Petitioner on 9th May, 2018. Thereafter, some time in September, 2022 the Petitioner’s Director, Mr. Rakesh Jain was suffering from ill health and was unable to file the GST Returns. It is further submitted that GST Returns were thereafter duly filed till March, 2023.

6. It is submitted that the Petitioner is aggrieved by the retrospective cancellation of the GST Registration.

7. Ms. Benjamin, Ld. SSC for the Respondent-Department submits that an order of GST Registration cancellation is usually given effect from the date of issuance of show cause notice. In this case, since the GST Returns were not filed by the Petitioner, the retrospective cancellation may have been undertaken.

8. A perusal of the SCN dated 10th March, 2023 shows as under: As can be seen, the reason given for cancellation is as under: “Non-compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed:”

9. In the opinion of this Court, the alleged violation, as stated in the SCN is completely incomprehensible as it generally alleges non-compliance of unspecified provisions of the GST Act and Rules. There is no specific Section or Rule mentioned. In such a case, it is impossible for any assessee to figure out as to which provision has been violated and as to what reply ought to be given. The GST official issuing such notice ought to be careful to mention the specific provision of the GST Act and Rule of which violation is alleged. It is only then that the Assessee can give a proper reply to such a show cause notice.

10 Hence, the SCN is in fact completely untenable in law as there is no clarity as to the aspect on which the assessee has to show cause.

11. The Petitioner has also handed across the statement showing the GST Returns that have been belatedly filed: Financial Year Tax Period Date of Filing Status 2022-2023 March 18/04/2023 Filed 2022-2023 February 16/03/2023 Filed 2022-2023 January 17/02/2023 Filed 2022-2023 December 19/01/2023 Filed 2022-2023 November 20/12/2022 Filed 2022-2023 October 17/11/2022 Filed 2022-2023 September 19/10/2022 Filed 2022-2023 August 17/09/2022 Filed 2022-2023 July 29/08/2022 Filed 2022-2023 June 21/07/2022 Filed Financial Year Tax Period Date of Filing Status 2022-2023 March 07/04/2023 Filed 2022-2023 February 04/03/2023 Filed 2022-2023 January 07/02/2023 Filed 2022-2023 December 06/01/2022 Filed 2022-2023 November 05/12/2022 Filed 2022-2023 October 08/11/2022 Filed 2022-2023 September 08/10/2022 Filed 2022-2023 August 08/09/2022 Filed 2022-2023 July 09/08/2022 Filed 2022-2023 June 08/07/2022 Filed

12. Under these circumstances and in view of the medical exigency faced by the Director, it is held that the cancellation of GST Registration of the Petitioner shall only be with effect from 10th March, 2023. The Petitioner has no objection to the same as the Petitioner is no longer carrying on the business.

13. The GST Department Officials ought to be careful not to issue such ambiguous show cause notices in future.

14. Let a copy of this order be circulated to all the GST Commissionerates and the concerned Superintendents of the various wards of the DGST department so that it can be ensured that such show cause notices, that do not mention any specific provisions are not issued in future.

15. The petition is disposed of in these terms. Pending applications, if any, are also disposed of.