Contradiction in GST Order regarding Submission of Reply: Delhi HC modifies Order Cancelling GST Registration [Read Order]

The Delhi High Court modified the order cancelling Goods and Service Tax ( GST ) registration to cancel the retrospective effect. There is a contradiction regarding the submission of the reply. The order stated that the registration is liable to be cancelled for the following reason “whereas no reply to the show cause notice has been submitted”. However, the said order in itself stated that “a reference to your reply dated 15.02.2023 in response to the notice to show cause dated 15.01.2023”.

Mr. Puneet Rai, Mr. Sushil Gaba and Mr. Kapil Sharma, Advocates appeared for the Petitioner. Mr. Rajeev Aggarwal appeared for the Respondents.

Ashish Garg, the petitioner challenged the order whereby the GST registration of the Petitioner was cancelled retrospectively with effect from 28.05.2018. Petitioner also impugns Show Cause Notice dated 15.01.2023.

Sh. Ashish Garg, legal heir of Late Sh. Pawan Kumar, who was the proprietor of M/s Kirti Plastics and was engaged in the business of manufacturing Plastics. He was registered under the Goods and Service Act, 2017 (‘the Act’) and claims to have been regularly filing GST returns and making GST payments under the law. 

A show cause notice was issued to the petitioner. Though the notice does not specify any cogent reason, there is an observation in the notice stating failure to furnish returns for a continuous period of six months. 

Further, the impugned order dated 14.03.2023 passed on the Show Cause Notice dated 15.01.2023 does not give any reasons for cancellation. It, however, stated that the registration is liable to be cancelled for the following reason “whereas no reply to the show cause notice has been submitted”. However, the said order in itself is contradictory.

 The order states “a reference to your reply dated 15.02.2023 in response to the notice to show cause dated 15.01.2023” and the reason stated for the cancellation is “whereas no reply to notice show cause has been submitted”. The order further states that the effective date of cancellation of registration is 28.05.2018 i.e., a retrospective date.

A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja noted that both the Petitioners and the department want cancellation of the GST registration of the Petitioner, though for a different reason. 

Since the Petitioner does not seek to carry on business or continue with the registration, the Court modified the impugned order to the limited extent that registration shall now be treated as cancelled with effect from 15.08.2021 i.e., the date when Sh. Pawan Kumar passed away. The petitioner shall furnish the details as required by Section 29 of the Income Tax Act. 

To Read the full text of the Order CLICK HERE

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