Delhi High Court
Ms Rs Wires Industries Through ... vs Sales Tax Officer Class Ii Avato Ward 63 ... on 3 January, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision
decision: 03.01.2024
,,,,,,,,,,
+ W.P.(C) 16189/2023 & CM APPL. 65071/2023
MS RS WIRES INDUSTRIES THROUGH
PROPRIETOR RAJENDER SINGH ..... Petitioner
versus
SALES TAX OFFICER CLASS
II AVATO WARD 63 ZONE 6 DELHI ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. R. P. Singh & Ms. Priyanka Goel, Advocates
Advocates.
For the Respondents:
Respondent Mr. Rajeev Aggarwal with Ms. Samridhi Vats,
Advocate.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns show cause for cancellation dated
18.04.2022 and the orders of rejection and applications for revocation
of cancellation dated 30.08.2023.
2. Learned counsel for the petitioner submits that show cause
notice issued under Section 29 of the Goods and Services Tax Act,
20177 ['the Act'] was itself defective as it did not give any details of
the alleged wrongful availment or utilization of input tax credit.
3. Learned counsel submits that show cause notice dated
18.04.2022 did not give any details, however, mentions that the de
details
were enclosed and submits that what was enclosed with the show
cause notice was a mere photograph of an unknown individual. He
submits that revocation applications were filed, however, the same
have been rejected by orders dated 27.04.2022 and 28.06.
28.06.2023, and all
of which do not contain any reasons. Even order dated 30.08.2023
merely states that the reply of the petitioner has been examined but the
same has not been found to be satisfactory for the reasons "the reason
entered for revocation of cancellation
cancellation is not appropriate".
4. Issue notice. Notice is accepted by learned counsel for the
respondent. With the consent of learned counsel for parties, the
petition is taken up for hearing today.
5. The show cause notice dated 18.04.2022 seeking cancellation of
registration
egistration gives the following reasons:-
reasons:
"Wrongful availment or utilization of Input Tax Credit
(details notice enclosed)."
6. It is not disputed that what was enclosed with the show cause
notice were not any details but a photograph of an individual, which is
appended to the petition at page 44.
7. The show cause notice ex facie is defected as the same does not
contain any details quantum
quantum of wrongful availment of Input Tax
Credit or any refund claimed on the said account or reasons. Reference
may be made to the judgment of a coordinate Bench of this Court in
Infinity Infomatic Pvt Ltd vs. CGST, Delhi [2023 (11) CENTAX 263
(Del.)
8. Further, we may note that the order of cancellation of
registration dated 18.04.2022 makes a reference to a reply of the
petitioner dated 27.04.2022 and then states that no reply to show cause
notice has been submitted. Further, order dated 28.06.2023 rejecting
the application for revocation of cancellation also states that no reply
has been received within time.
9. Neither the show cause notice nor the orders rejecting the
revocation application contain any details or reasons. There is nothing
available on record either in the show cause notice or the orders as to
the alleged wrongful availment or utilization of input tax credit. On
this ground alone, the show cause notice as well as the application
seeking revocation are not sustainable.
10. The impugned order also seeks to cancel the registration with
effect from 01.07.2017. 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.
11. In terms of Section 29(2) of
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
sub-section are
satisfied. The registration
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 no
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.
12. It is important to note that, according
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.
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
tion 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.
13. Consequently, the show cause notice and the impugned orders
are quashed
shed being bereft of requisite details and reasons. The petition
is allowed. However, respondent is given liberty to initiate appropriate
proceedings in accordance with law after giving a proper show cause
notice containing complete details, if so advised.
advised
14. Petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA
DUDEJA, J
January 03, 2024/vp
