Delhi High Court
Kwatra Auto Industries Through Its ... vs Commissioner Of Delhi Goods And ... on 2 February, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 02.02.2024
,,,,,,,,,,
+ W.P.(C) 1557/2024
KWATRA AUTO INDUSTRIES THROUGH ITS PROPRIETOR
YOGESH KUMAR MAL ..... Petitioner
versus
COMMISSIONER OF DELHI GOODS AND SERVICES TAX ACT
& ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. M. A. Ansari, Mr. Khursheed Ahmad, Mr.
Arvind KumarSoni, Mohd Kamil & Mr. Ahmad
Ansari, Advocates.
For the Respondent: Ms. Shaguftha, Advocate.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns Order in Appeal dated 03.01.2024 whereby the
appeal filed by the Petitioner has been dismissed solely on the ground
of limitation.
2. Petitioner filed the appeal impugning order of cancellation
registration dated 25.11.2019 whereby the GST registration of the
Petitioner
etitioner was cancelled retrospectively
retrospectively with effect from 01.07.2017
01.07.2017.
Petitioner also impugns show cause notice dated 14.11.2019.
3. Vide show cause
c notice dated 14.11.2019, Petitioner
etitioner was called
upon to show cause as to why the registration be not cancelled for the
following reasons :-
"Taxpayer found Non-Functioning/Not
Non Functioning/Not Existing at the Principal
Place of Business".
Business"
4. Petitioner, a proprietorship concern with trade name "M/s Kwatra
Auto Industries having the principal place of business at 28/126,Gali
No.13 NALA Side Vishwas Nagar Shahdra Delhi-110032
110032 was engaged
in business of trading in parts and accessories of Motor Vehicle
Vehicles.
5. The show cause notice issued
ssued to the Petitioner on 14.11.2019
merely states "taxpayer
taxpayer found non-functioning/non-existing
non existing at principal
place of business".
business Further, the impugned order dated 25.11.2019
merely stated that "No
"No reply to the show cause notice has been
submitted" and the effective date of cancellation of registration is
01.07.2017 i.e. with retrospective effect.
6. The Show Cause Notice and the Impugned Order do 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.
7. It was brought to the notice of the Court that Petitioner migrated
from DVAT to CGST Act after the commencement of GST Act,
whereby the petitioner had uploaded the rent agreement at GST Portal
for the Principal Place of business 25/20 Gali No.16
No Vishwas Nagar,
Shahdara -110032
110032.. But inadvertently the account for the petitioner
entered the old address of the principal office. Petitioner was
conducting business at his principal place of business 25/20 Gali No
No.16
Vishwas Nagar, Shahdara -110032 vide registered rent agreement.
8. Learned Counsel for the petitioner
p submits that the petitioner had
filed the last GSTR-3B
GSTR 3B return output tax liability for September 2019
and has shut the business w.e.f 01.10.2019.
01.10.2019
9. 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
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.
10. It is important to note that, according to the respondent, oone 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
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.
warranted
11. In view of the above, facts and circumstances, the order of
cancellation is modified to the
the extent that the same shall operate with
effect from 01.10.2019, i.e. the date business was shut down.
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
from the petitioner in accordance with law.
13. Petition
etition is accordingly disposed of in the above terms
terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA
DUDEJA, J
FEBRUARY 02,
02 2024/sk
