The Delhi High Court disposed of a petition impugning the order dated 13.02.2021, whereby the GST registration of the petitioner was cancelled retrospectively with effect from 15.07.2017. The Court observed that 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 Section 29(2) are satisfied.
Brief Facts:
Vide Show Cause Notice dated 03.02.2021, the petitioner was called upon to show cause as to why the registration be not cancelled on the ground that “Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months.” Thereafter, the impugned order dated 13.02.2021 passed on the Show Cause Notice does not give reasons for cancellation. It, however, states that the registration is liable to be cancelled for the following reason “whereas no reply notice to show cause has been submitted”. Pursuant to the said impugned order, Petitioner filed an application dated 04.06.2021 seeking revocation of cancellation of registration. Said application was rejected vide order dated 23.05.2023, whereby it was merely stated “You have not replied to the notice issued dated 18.08.2022 within the time specified therein.” Hence, the present petition.
Contentions of the Petitioner:
The Learned Counsel for the Petitioner submitted that the Petitioner is no longer interested in continuing the business and has closed down his business activities due to ill health.
Observations of the Court:
The Court noted that the Show Cause Notice and the impugned order are bereft of any details; accordingly, the same cannot be sustained, and neither the Show Cause Notice nor the order spell out the reasons for retrospective cancellation.
The Court observed that 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 Section 29(2) are satisfied. Registration cannot be cancelled with a 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 a retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
The Decision of the Court:
The Delhi High Court, dismissing the application, held that the impugned order dated 13.02.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 03.02.2021 i.e., the date when the Show Cause Notice was issued.
Case Title: Bijender Thakur v Commissioner of GST & Ors.
Coram: Hon’ble Justice Sanjeev Sachdeva and Hon’ble Justice Ravinder Dudeja
Case No.: W.P.(C) 3381/2024
Advocate for the Petitioner: Mr. Prince Mohan Sinha, Mr. Dinesh Mohan Sinha, Mr. Maneesh Jain and Mr. Rajeev Deora
Advocate for the Respondents: Mr. Rajeev Aggarwal and Ms. Samridhi Vats
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