GST Registration can be Cancelled with Retrospective Effect only where such Consequences are Intended and Warranted: Delhi HC [Read Order]
GST Registration can be Cancelled with Retrospective Effect only where such Consequences are Intended and Warranted, rules Delhi HC
![GST Registration can be Cancelled with Retrospective Effect only where such Consequences are Intended and Warranted: Delhi HC [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/01/GST-Registration-Cancelled-Retrospective-Effect-Consequences-Warranted-Delhi-HC-TAXSCAN.jpg "GST Registration can be Cancelled with Retrospective Effect only where such Consequences are Intended and Warranted: Delhi HC [Read Order]")
The Delhi High Court in a significant ruling observed that the GST registration can be cancelled with retrospective effect only where such consequences are intended and warranted. Petitioner impugned order dated 02.05.2023 and Show Cause Notice dated 06.09.2022. Vide Show Cause Notice dated 06.09.2022, petitioner was called upon to show cause as to why the registration be not cancelled....
The Delhi High Court in a significant ruling observed that the GST registration can be cancelled with retrospective effect only where such consequences are intended and warranted.
Petitioner impugned order dated 02.05.2023 and Show Cause Notice dated 06.09.2022. Vide Show Cause Notice dated 06.09.2022, petitioner was called upon to show cause as to why the registration be not cancelled. Vide impugned order dated 02.05.2023, the registration of the petitioner has been cancelled with effect from the date of its registration on 27.06.2018
By virtue 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 sub sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically.
The Section further notes that it can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer's registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
A Division Bench comprising observed that “Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.”
To Read the full text of the Order CLICK HERE
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