Cancellation of GST Registration without specific Reason: Delhi HC directs reconsideration of Application for Amendment & Revocation of Cancellation of GST Registration [Read Order]

The High Court of Delhi has directed the reconsideration of the application for the amendment of Goods and Services Tax (GST) registration and revocation of cancellation of registration of the petitioner on the finding that both applications were rejected without any specific reason.

The petitioner, M/S Sai Aluminium Exim, represented by Mr. Pranay Jain and Mr. Karan had approached the High Court challenging the cancellation of its GST registration.

The respondent revenue, PR Commissioner of Goods and Service Tax North Delhi was represented by Mr. Arnav Kumar, Mr. Aranya Sahay and Mr. Gurdas Khurana.

The primary grounds of challenge presented by the petitioner were the rejection of its application for amendment of GST registration and the subsequent cancellation of the registration.

The petitioner claimed to have changed its principal place of business in 2022 and filed an application on June 11, 2022, seeking an amendment to reflect this change. However, the application was rejected on May 9, 2023, citing non-submission of requisite information.

Following this, on September 1, 2023, a Show Cause Notice (SCN) was issued to the petitioner proposing the cancellation of its GST registration under Section 29(2)(e) of the GST Act, 2017, alleging registration obtained by means of fraud, wilful misstatement or suppression of facts.

The petitioner contended that it did not receive a specific reason for the cancellation in the SCN, which was also silent on the alleged fraudulent activities.

The bench observed that the SCN did not provide specific reasons for the cancellation and the subsequent order dated September 14, 2023, which cancelled the registration with retrospective effect from July 1, 2017, did not offer any explanation either.

The court noted that the petitioner’s name was included in a list provided by the Anti-Evasion Branch, but relevant documents related to the petitioner were not forwarded to them.

The division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan held that the order cancelling the petitioner’s GST registration lacked reasons and set aside the order dated May 9, 2023, rejecting the application for amendment. The court directed the petitioner to file all necessary documents and information before the concerned officer in support of its application for the revocation of the cancellation of GST registration.

The bench emphasised that the concerned officer should satisfy themselves that the petitioner is operating its business at the claimed principal place. If the officer is convinced, the order cancelling the GST registration shall be revoked.

The bench highlighted the importance of providing specific reasons for the cancellation of GST registrations and highlighted the need for a fair opportunity for affected parties to present their case. The petitioner has been granted an opportunity to rectify the situation by submitting the required documents and information, ensuring due process in the proceedings.

To Read the full text of the Order CLICK HERE

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