Delhi HC directs to consider Date of SCN for Canceling GST Registration [Read Order]

In a significant case, the Delhi High Court ordered that the date of the show-cause notice for canceling the household trader's Goods and Services Tax (GST) registration be taken into consideration
Delhi High Court - SCN - GST - Show Cause Notice - GST Registration - Canceling GST Registration - taxscan

The Delhi High Court in a significant case directed to consider the date of show cause notice for canceling the Goods and Service Tax ( GST ) registration of Household trading.

The  petitioner Himanshu Goyal filed the writ petition. He was in the business of trading household edible items and had obtained the GST Registration. The petitioner closed his business in June 2022. Subject Show Cause Notice dated 18.07.2022 was issued on the ground that the petitioner had not filed the returns. Petitioner was called upon to file a reply and appear for personal hearing on the appointed date and time.

During the proceedings, counsel for the petitioner submitted that the Show Cause Notice shows that there was no date, time or venue mentioned where the petitioner had to appear pursuant to the Show Cause Notice. The Show Cause Notice does not even bear the name and designation of the Officer issuing the Show Cause Notice

According to the Counsel for 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 taxpayer during such period.

The bench observed that 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 subsection are satisfied.

Registration cannot be canceled with retrospective effect mechanically. It can be canceled only if the proper officer deems it fit to do so. Thus Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be canceled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.

Furthermore Both the petitioner as well as the respondent want cancellation of GST registration. Accordingly, the impugned order dated 12.10.2022 is modified to the effect that the cancellation of registration shall be effective from 18.07.2022 i.e. the date of the Show Cause Notice on which date the registration was also suspended.

Therefore the division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, directed to consider the date of show cause notice for canceling the Goods and Service Tax ( GST ) registration of Household trading

Mr. Santanu Kanungo & Mr. Himanshu Goel, advocates Who appeared for the petitioner.

Mr. Rajeev Aggarwal, Advocate who  appeared for the revenue.

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