Delhi High Court
Kiran Devi Goel( Prop. M/S Shree Krishna ... vs Superintendent Range - 23,Central ... on 20 March, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~38
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 20.03.2024
+ W.P.(C) 4251/2024
KIRAN DEVI GOEL (PROP. M/S SHREE KRISHNA
ENTERPRISES ..... Petitioner
versus
SUPERINTENDENT RANGE-23, CENTRAL GOODS AND
SERVICES TAX & ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Nitin Gulati for Ms. Reena Gandhi &
Mr. Sachin Goyal, Advocates.
For the Respondents: Mr. Harpreet Singh, SSC with Ms. Suhani
Mathur & Mr. Jatin Kumar Gaur, Advocates.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner impugns order dated 17.07.2023 whereby the GST
registration of the petitioner was cancelled retrospectively with effect
from 07.07.2017. Petitioner also impugns Show Cause Notice dated
27.06.2023.
2. By Show Cause Notice dated 27.06.2023, petitioner was called
upon to show cause as to why the registration be not cancelled for the
following reason:-
"Section 29(2)(e)-registration obtained by means of
fraud, wilful misstatement or suppression of facts".
3. Said Show Cause Notice was issued to the petitioner on
27.06.2023. Though the notice does not specify any cogent reason, it
merely states "Section 29(2)(e)-registration obtained by means of fraud,
wilful misstatement or suppression of facts". Show Cause Notice
required the petitioner to appear on 04.07.2023 at 1:20 PM before the
undersigned i.e. authority issuing the notice. However, the said Notice
does not give the name or designation of the officer or place where the
petitioner has to appear.
4. Thereafter, the impugned order dated 17.07.2023 passed on the
Show Cause Notice does not give any reasons for cancellation. It merely
states "reference to show cause notice issued dated 27/06.2023" and
subsequently states "the effective date of cancellation of your
registration is 07/07/2017". The order further states that effective date of
cancellation of registration is 07.07.2017 i.e., a retrospective date.
5. Learned counsel for Petitioner submits that the Petitioner had filed
an application for condonation of delay of revocation of cancellation of
registration dated 21.08.2023 on the ground that processing of
documents got delayed due to a family member's medical condition.
6. He further submits that the Petitioner was served with a Show
Cause Notice dated 14.02.2024 on the application dated 21.08.2023,
however, Petitioner being a senior citizen could not reply to the said
notice as she received the notice late. Thereafter, vide order dated
07.03.2024, the said application was rejected on the ground "No
response received from the taxpayer, nor the taxpayer appeared for
personal hearing, hence request for condonation of delay is being
rejected".
7. We notice that the Show Cause Notice and the impugned order are
bereft of any details. Accordingly, the same cannot be sustained. Neither
the Show Cause Notice, nor the order spell out the reasons for
retrospective cancellation.
8. Further, the said Show Cause Notice also does not put the
petitioner to notice that the registration is liable to be cancelled
retrospectively. Thus, 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-section are satisfied. The
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, one of the
consequences for cancelling a taxpayer'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 taxpayer 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 aforesaid, the order dated 17.07.2023 cannot be
sustained and is accordingly set aside. The GST registration of the
petitioner is restored. Petitioner shall, however, make all necessary
compliances and file the requisite returns and information inter alia in
terms of Rule 23 of the Central Goods and Services Tax Rules, 2017.
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 of the GST registration.
13. The petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J
MARCH 20, 2024/RM
