The Delhi High Court quashed the Show Cause Notice ( SCN ) issued for cancellation of Goods and Service Tax (GST) registration without stating the reason.
M/S Kundan Impex, the petitioner challenged the show cause notice dated 05.07.2023 whereby the registration of the petitioner has been suspended. The petitioner further seeks a direction from the respondent to cancel the registration of the petitioner from the date when the last return was filed i.e. in July 2023.
The petitioner submitted that the show cause notice does not give any reason or detail but merely refers to the letter of Assistant Commissioner ( Okhla Division ) GST, South Delhi Commissionerate. He submits that a copy of the letter has also not been provided.
There is an allegation that one Neeraj Enterprises had issued invoices without any underlying supply of goods or services and passed on fraudulent input tax credits to various recipients and the petitioner is alleged to be one of such recipients.
Counsel for the petitioner submitted that the petitioner does not intend to carry on any business in the same entity for the reason that the registration was suspended by the impugned show cause notice dated 05.07.2023 and the petitioner for the last six months has not been able to carry on any business and he accordingly seeks cancellation of the registration.
Since the show cause notice does not contain the requisite details, the same was quashed by the Court comprising Justice Sanjeev Sachdeva And Justice Ravinder Dudeja.
The court observed that even the letter dated 12.06.2023 does not give any clarity as to the allegation of availing of fraudulent input tax credit by the petitioner. However held that it is open to the respondent to take further action following law inter alia, cancellation of registration with retrospective effect. However, the same would be by law and under a proper Show Cause Notice and an opportunity of hearing is given to the petitioner.
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