Delhi High Court
R. Trading Co. Proprietorship Of ... vs Commissioner Of Delhi Goods And ... on 5 February, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~25
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on: 05.02.2024
+ W.P.(C) 809/2024
R. TRADING CO. PROPRIETORSHIP OF MR.RAJENDRA
KUMAR BOTHRA THROUGH LEGAL HEIR SH. MUDIT
BOTHRA ..... Petitioner
Versus
COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND
ANOTHER ....Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Rakesh Kumar, Mr. Subhash Chandra Gupta, Mr.
Akul Mangla and Mr. Shailender Verma, Advocates.
For the Respondents: Ms. Shagufta H. Badwar, Ms. Samridhi Vats, Advocates
for Mr. Rajeev Aggarwal, Additional Standing Counsel.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner seeks quashing of show cause notice dated
12.11.2021 issued on the ground that "Retuns 3 B not filed GTO more
than 5 crore" and impugns order dated 30.12.2021 cancelling the
registration of the firm retrospectively with effect from 01.07.2017.
2. The subject petition has been filed by Mr. Mudit Bothra, legal
heir of late Mr. Rajendra Kumar Bothra, who was the sole proprietor
of M/s R. Trading Company and was registered under the Goods and
Services Tax Act, 2017 (hereinafter referred to as the Act).
3. As per the Petitioner, Mr. Rajendra Kumar Bothra expired on
13.04.2021 and consequently, No GST returns were filed after April,
2021 on account of his passing away.
4. Since no reply was received to the show cause notice, the
Assistant Commissioner passed the impugned order dated 30.12.2021,
cancelling the registration retrospectively with effect from
01.07.2017.
5. Learned counsel for the Petitioner submits that the Petitioner
does not intend to carry on business and the business has been
discontinued immediately on the demise of Mr. Rajendra Kumar
Bothra.
6. 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.
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. There is nothing on record to show that the deceased was not
making the requisite compliances under the Act. As such the
retrospective cancellation is not warranted
9. We may also note that the show cause notice did not put the
noticee to notice that the registration was liable to be cancelled
retrospectively. Accordingly, the Petitioner had no opportunity to
even object to the retrospective cancellation of the registration.
10. In view of the fact that petitioner does not seek to continue the
registration, the impugned order dated 30.12.2021 is modified to the
limited extent that registration shall now be treated as cancelled with
effect from 13.04.2021 i.e., date of demise of late Mr. Rajendra
Kumar Bothra. The Petitioners i.e., legal heir of the deceased
proprietor shall file the requisite returns of any transactions of the
business done and shall also place the details of stock left at the time
of his death.
11. 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.
12. Petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
FEBRUARY 05 2024 RAVINDER DUDEJA, J
NA
