Delhi High Court
Koxan India vs Asstt. Commissioner Of Gst & Anr. on 12 February, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 12.02.2024
+ W.P.(C) 1262/2024
KOXAN INDIA ..... Petitioner
versus
ASSTT. COMMISSIONER OF GST & ANR. ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Prince Mohan Sinha & Mr. Dinesh Mohan Sinha,
Advocates.
Respondent: Mr. Rajeev Aggarwal, ASC with Ms. Samridhi Vats,
Advocate.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Learned counsel for the petitioner submits that an
application has been filed in the Registry placing on record the
correct documents. However, the application is not on record.
Copy of the application along with the documents are produced.
The same is taken on record.
2. Since the petitioner merely seeks to place on record
additional documents, the Registry need not list the application.
The documents are taken into consideration.
3. Petitioner impugns order dated 24.03.2021, whereby GST
registration of the petitioner has been cancelled retrospectively
with effect from 01.07.2017. Petitioner also impugns Show Cause
Notice dated 17.02.2021 wherein petitioner was called upon to
show cause as to why the registration be not cancelled for the
following reason: -
"Any Taxpayer other than composition taxpayer has not filed
returns for a continuous period of six months".
4. Learned Counsel for petitioner submits that petitioner has
filed the GST returns for the period ending 30.09.2020 and
thereafter petitioner has not carried out any business and is not
interested in conducting any business and wishes to close the
business.
5. The impugned order of cancellation dated 24.03.2021 states
that the registration is liable to be cancelled for the following
reason "Whereas no reply to notice to show cause has been
submitted". It seeks to cancel the registration with retrospective
effect from 01.07.2017. There is no material on record to show as
to why the registration is sought to be cancelled retrospectively.
6. 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.
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. It is clear that both the petitioner and the respondent want
the GST registration to be cancelled, though for different reasons.
10. In view of the above facts and circumstances, the order of
cancellation is modified to the extent that the same shall operate
with effect from 30.09.2020, i.e., the period upto which the
Petitioner has filed its GST returns.
11. It would be, however, open to the respondent to take further
action in accordance with law. 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.
12. The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
FEBRUARY 12, 2024/sk
