Delhi High Court
M S Bridgekala Luxurious Lifestyle ... vs Commissioner Of Delhi Goods And ... on 18 January, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision
decision: 18.01.2024
,,,,,,,,,,
+ W.P.(C) 661/2024 & CM APPLs. 2992/2024, 2993/2024
M S BRIDGEKALA LUXURIOUS LIFESTYLE MANAGEMENT
PRIVATE LIMITED ..... Petitioner
versus
COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND
ANOTHER ..... Responden
Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Rakesh Kumar, Advocate.
For the Respondents:
Respondent Mr. Rajeev Aggarwal, ASC with Mr. Prateek and Ms.
Samridhi, Advocates.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 27.02.2023,, whereby the GST
registration of the petitioner was cancelled retrospectively with effect
from 11.01.2020 and also impugns Show Cause Notice dated
08.11.2022.
2. Vide Show Cause Notice dated 08.11.2022,, petitioner was
called upon to show cause as to why the registration be not cancelled
for the following reasons:-
reasons:
"returns
returns furnished by you under section 39 of the Central Goods
and Services Tax Act, 2017"
3. Subsequently, the impugned order of cancellation dated
08.11.2022 cited the following reason:-
"Failure
Failure to furnish returns for a continuous period of six months
months"
4. Learned counsel for the petitioner submits that petitioner could
not file the returns on account of lapse on the part of the accountant.
He submits that petitioner is aggrieved by the retrospective
cancellation of registration with effect from 11.01.2020. He submits
that registration should
sh have been cancelled from the date of
08.11.2022 i.e. the date when the show cause notice was issued and
the registration was suspended.
5. He submits that petitioner would apply for fresh registration.
6. We may note that though the Show Cause Notice states that
petitioner failed to file returns under Section 39 of the Go
Goods and
Services Tax Act, 2017.
7. The impugned order seeks to cancel the registration with effect
from 11.01.2020.
11.01.2020. There is no material on record to show as to why the
registration is sought to be cancelled retrospectively.
8. Further, the
he 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.
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
sub-section are
satisfied. Registration
egistration 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
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
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
yer 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.
11. 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 08.11
11.2020, i.e., the date when the show cause notice was
issued and the registration was suspended.
12. It is clarified that the respondents
respondents are also not preclud
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. The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA
DUDEJA, J
January 18,, 2024/vp
