The Delhi High Court set aside the retrospective cancellation of GST since it was made without stating any Cogent Reason. The court found that the Show Cause Notice and the impugned order are bereft of any details.
Sumeet Singh, the Petitioner challenged the order whereby the appeal of the Petitioner has been dismissed solely on the ground that the same is barred by limitation. Petitioner also impugns order whereby the GST registration of the Petitioner was cancelled retrospectively with effect from 01.07.2017. Petitioner also impugns Show Cause Notice.
Subject petition has been filed by Sh. Sumeet Singh, legal heir of Late Sh. Mohinder Mohan Singh, who was the proprietor of M/s Saran Singh & Sons. Petitioner was engaged in the business of supplying spices and dry fruits and was registered under the Goods and Service Act, 2017 (hereinafter referred to as „the Act‟).
A Show Cause Notice was issued to the Petitioner. Though the notice does not specify any cogent reason, it merely states “returns furnished by you under section 39 of the Central Goods and Services Tax Act,2017” along with an observation stating “failure to furnish returns for a continuous period of six months”. Said Show Cause Notice required the petitioner to appear on 02.10.2021 at 11:00 before the undersigned i.e. authority issuing the notice. However, the said Notice does not give the name of the officer where the petitioner has to appear. It merely mentions “Jurisdiction Officer”.
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.
Thereafter, the impugned order passed on the Show Cause Notice dated 02.09.2021 does not give any reasons for cancellation. It, however, states that the registration is liable to be cancelled for the following reason “Whereas no reply to notice to show cause has been submitted”.
The order further stated that effective date of cancellation of registration is 01.07.2017 i.e., a retrospective date. Further, it may be noted that on one hand, it states that the registration is liable to be cancelled and on the other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand.
A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja found 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.
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 16.10.2020 i.e., the date when Sh. Mohinder Mohan Singh passed away. The petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017.
Dr Chakit Singhal, Mr. Suresh Kumar Singhal, Mr. Mohit Singhal, Mr.Aditya Shubha and Ms. Sonali Singla appeared for the petitioner. Mr. Rajeev Aggarwal, ASC with Ms. Shaguftha H. Badhwar, Mr. Prateek Badhwar and Ms. Samridhi appeared for the respondent.
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