Delhi High Court
Mukesh Kumar Singh vs Commissioner Of Delhi Gst And Ors on 25 April, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~66
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 25.04.2024
W.P.(C) 5791/2024 & CM APPLs. 23959-60/2024
MUKESH KUMAR SINGH ..... Petitioner
versus
COMMISSIONER OF DELHI GST AND ORS ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Vedant Chandel, Mr. Vikram Saini and Mr.
Surinder Kaul Aberdar, Advocates.
For the Respondent: Mr. Rajeev Aggarwal, ASC with Mr. Manohar
Mittal, Advocate.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 28.03.2024 whereby the appeal
of the Petitioner has been dismissed solely on the ground that the same
is barred by limitation. Petitioner also impugns order dated 04.05.2023
whereby the GST registration of the petitioner was cancelled
retrospectively with effect from 01.07.2017 and also impugns Show
Cause Notice dated 18.08.2021.
2. Issue Notice. Notice is accepted by learned counsel appearing
for respondent. With the consent of the parties, petition is taken up for
final disposal today.
3. Vide Show Cause Notice dated 18.08.2021, petitioner called
upon to show as to why the registration be not cancelled for the
following reasons:-
"Any taxpayer other than composition taxpayer has not
filed returns for a continuous period of six months"
4. Petitioner is engaged in the business of TMT Bars and
possessed GST Registration under the Central Goods and Services
Act, 2017 (hereinafter referred to as the Act).
5. Said Show Cause Notice dated 18.08.2021 was issued to the
petitioner seeking to cancel its registration. Though the notice does
not specify any cogent reason, it merely states "Any Taxpayer other
than composition taxpayer has not filed returns for a continuous
period of six months". The Show Cause Notice required the petitioner
to appear before the undersigned i.e., authority issuing the notice.
However, the said notice does not bear the date and time whereby the
Petitioner was required to appear for personal hearing.
6. Further, the Show Cause Notice also does not put the petitioner
to notice that the registration is liable to be cancelled retrospectively.
Thus, the petitioner had no opportunity to even object to the
retrospective cancellation of the registration.
7. Thereafter, the impugned order dated 04.05.2023 passed on the
Show Cause Notice does not give any reasons for cancellation. It
merely states that the registration is liable to be cancelled for the
following reason "Whereas no reply to notice to show cause has been
submitted". Further, said order in itself is contradictory. The order
states "reference to your reply dated 04/05/2023 in response to the
notice to show cause dated 18/08/2021" and the reason stated for
cancellation is "Whereas no reply to notice to show cause has been
submitted". The order further states that effective date of cancellation
of registration is 01.07.2017 i.e., a retrospective date. There is no
material on record to show as to why the registration is sought to be
cancelled retrospectively.
8. It may be noted that on one hand, the order states that the
registration is liable to be cancelled and on the other, in the column at
the bottom there are no dues stated to be due against the petitioner and
the table shows nil demand.
9. As per the Petitioner, he was not aware of the notice and orders
cancelling GST registration of the Petitioner.
10. Learned counsel for Petitioner submits that Petitioner is no
longer continuing business and the business activities of the Petitioner
have been closed down. He further submits that Petitioner has filed all
returns till August 2021.
11. We notice that the Show Cause Notice and the impugned order
are also bereft of any details. Neither the Show Cause Notice, nor the
order spell out the reasons for retrospective cancellation. Accordingly,
the same cannot be sustained.
12. In terms of Section 29(2) of the Act, 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-section are satisfied. 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.
13. It is important to note that, according to the respondent, one of
the consequences for cancelling a taxpayer'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 the tax
payer during such period. Although, we do not consider it apposite to
examine this aspect but assuming that the respondent's contention is
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.
14. It is clear that both the petitioner and the respondent want the
GST registration to be cancelled, though for different reasons.
15. In view of the above and the fact that the Petitioner does not
seek to carry on business or continue the registration, the impugned
order dated is modified to the limited extent that registration shall now
be treated as cancelled with effect from 18.08.2021 i.e., the date when
Show Cause Notice was issued. Petitioner shall make the necessary
compliances as required by Section 29 of the Central Goods and
Services Tax Act, 2017.
16. It is clarified that Respondents are not precluded from taking
any steps for recovery of any tax, penalty or interest that may be due
in respect of the subject firm in accordance with law including
retrospective cancellation of the GST registration after giving a proper
show cause notice and an opportunity of hearing to the petitioner.
17. Petition is disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
APRIL 25, 2024/vp
