Delhi High Court
Himanshu Goyal Proprietor Of M/S Raj And ... vs Principal Commissioner State Gst. ... on 27 February, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 27.02.2024
+ W.P.(C) 1199/2024
HIMANSHU GOYAL PROPRIETOR OF M/S RAJ AND
CO ...... Petitioner
versus
PRINCIPAL COMMISSIONER STATE GST. DELHI
AND ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Santanu Kanungo & Mr. Himanshu
Goel, Advocates.
For the Respondents: Mr. Rajeev Aggarwal, ASC.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
[ SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 12.10.2022, whereby, the GST
Registration of the Petitioner has been cancelled with effect from
08.06.2018 i.e. retrospective date.
2. Petitioner was in the business of trading of household edible
items and had obtained the GST Registration.
3. As per the petitioner, petitioner closed his business in June
2022. Subject Show Cause Notice dated 18.07.2022 was issued on the
ground that the petitioner had not filed the returns. Petitioner was
called upon to file a reply and appear for personal hearing on the
appointed date and time.
4. Show Cause Notice shows that there was no date, time or venue
mentioned where the petitioner had to appear pursuant to the Show
Cause Notice. The Show Cause Notice does not even bear the name
and designation of the Officer issuing the Show Cause Notice and
merely bears the digital signature signed by D.S. Goods & Services
Tax Network (4).
5. The impugned order cancelling the registration dated
12.10.2022 begins with a reference to a reply dated 27.07.2022 and
then states that no reply to notice to show cause has been submitted
and the effective date of cancellation is 08.06.2018. The notice
thereafter records that the petitioner has to pay the amounts mentioned
in the notice on or before 22.10.2022. However, the amounts
mentioned are 0.0 i.e. Nil.
6. 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. 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.
7. 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.
8. Further, Show Cause Notice dated 18.07.2022 and order dated
12.10.2022 does not put the petitioner to notice that the registration is
liable to be cancelled retrospectively. Accordingly, petitioner had no
opportunity to even object to the retrospective cancellation of the
registration.
9. Clearly, the impugned notice and impugned order are bereft of
any detail and are thus not sustainable. However, in the instant case,
the case of the petitioner is that petitioner has himself shut the
business since June 2022 and is no longer interested in the restoration
of the GST registration.
10. Both the petitioner as well as the respondent want cancellation
of GST registration, however, for different reasons. Accordingly, the
impugned order dated 12.10.2022 is modified to the effect that the
cancellation of registration shall be effective from 18.07.2022 i.e. the
date of the Show Cause Notice on which date the registration was also
suspended.
11. The petitioner shall however comply with the provisions of
Section 29 of the Central Goods & Service Tax Act, 2017 and file all
necessary details as mandated by the Act.
12. It is clarified that Respondents are also 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.
13. Petition is disposed of.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
FEBRUARY 27, 2024
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