Delhi High Court
Satendra vs Superintendent Circle -152,Central ... on 6 February, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 06.02.2024
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+ W.P.(C) 819/2024
SATENDRA ..... Petitioner
versus
SUPERINTENDENT CIRCLE -152, CENTRAL GOODS AND
SERVICES TAX & ANR. ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Nitin Gulati, Mr. Anurag Rajput and Mr. Dhruv
Bhardwaj, Advocates
For the Respondents: Mr. Arnav Kumar, SCC with Mr. Aranya Sahay,
Advocates.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 28.07.2023, whereby GST
registration of the petitioner was cancelled with effect from
05.12.2022. Vide Show Cause Notice dated 17.04.2023, 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."
2. We may note that though the Show Cause Notice states that
invoice or bill has been issued by the petitioner without supply of
goods and/or services leading to wrongful availment or utilization of
input tax credit or refund of tax. No particulars or details have been
mentioned in the Show Cause Notice. There is no reference to any
invoice or bill which the petitioner is alleged to have issued without
making any supplies. It appears that the Show Cause Notice extracts
the reason in a standard format as there are several other options
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".
3. It appears that the respondents are using a template for issuing
said notices without providing any particulars. There is no clarity as to
whether the petitioner has issued invoices or bills without supply or
the action of the petitioner has led to wrongful availment or utilization
of input tax credit or refund of tax.
4. Further, the Show Cause Notice also does not mention the
quantum of wrongful availment of input tax credit or any refund
claimed on the said account. The impugned order also does not state
any reasons for cancellation of the GST registration retrospectively
except to state that no reply to the show cause notice has been
received.
5. Perusal of the Notice also shows that it required the petitioner to
appear before the under signed on 01.05.2023, however, the Notice
neither bears the name, nor the designation of any officer who has
issued the notice. Further, the application filed by the petitioner
seeking revocation of the cancellation has been rejected by a cryptic
order that the party did not respond to the query. The Show Cause
Notice dated 31.08.2023 putting the petitioner to show cause for
rejection of the application seeking revocation, did not raise any query
but stated that reasons given in support of condonation were not
correct or justification is insufficient. Once again there is no clarity as
to what the petitioner was put to notice about, whether the reasons
were not correct or justification was insufficient ? Said Show Cause
Notice also required the petitioner to appear before the undersigned of
the said notice, however, once again there is no name or designation of
any officer in the said Show Cause Notice.
6. The impugned order also seeks to cancel the registration with
effect from 05.12.2022. There is no material on record to show as to
why the registration is sought to be cancelled retrospectively. There is
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) 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-section are
satisfied. The 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.
8. 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 the tax
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 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.
9. Further, the Show Cause Notice also does not put the petitioner
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. Both the show cause notices and the impugned order are bereft
of any reasoning and particulars and are accordingly not sustainable.
11. In view of the above, the Show Cause Notice as well as the
impugned order are set aside.
12. 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 accordance
with law and pursuant to a proper Show Cause Notice and an
opportunity of hearing being given to the petitioner.
13. Respondents are also not precluded from taking any steps for
recovery of any tax, penalty or interest that may be due from the
petitioner in accordance with law.
14. The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
FEBRUARY 06, 2024
NA
