GST Registration Cancellation Order not issued by Proper Officer: Delhi HC directs to Approach Authorities for Re-examination [Read Order]

A Division Bench of Delhi High Court while entering a writ petition regarding the cancellation of the Goods and Services Tax (GST) Registration, directed the petitioner to approach the authorities for the re-examination.

The petitioner is a Sole proprietor of the M/s Metal Edge has filed the present petition, inter alia, impugning an order whereby the petitioner’s GST registration was cancelled. The petitioner claimed that the impugned order was issued by respondent no.1 (Sales Tax Officer Class II), who is not a ‘proper officer’ and therefore, has no jurisdiction to pass such orders.

The petitioner also challenged the show cause notice issued under Section 73 of the Central Goods and Services Tax Act, 2017,  whereby respondent no. 1 had proposed to raise a demand of ₹95,81,779.10/-.

However, the petitioner’s challenge to the impugned order cancelling its GST registration and the show cause notice on the ground that the same were not issued by a proper officer is unmerited.

By a notification dated 01.11.2019 , the Commissioner of Trade & Taxes has assigned the function under Section 73 & 74 of the CGST Act to be performed by a proper officer “to all the Assistant Commissioners and Goods and Services Tax Officer of this Department”.

The Counsel of the Petitioner submitted that the impugned order and the impugned show cause notice were issued by the Sales Tax Officer Class II, AVATO, and since the said officer was not of the rank of the Assistant Commissioner, he could not have exercised the jurisdiction of a proper officer.

Further, the petitioner contended that the impugned show cause notice under Section 73 of the CGST Act was without jurisdiction, as the Central Goods and Service Tax Authorities in Chandigarh have already commenced investigation in respect of the petitioner.

It was also added that during the course of investigation conducted by authorities in Chandigarh, the entire record of the petitioner concern was seized by respondent no.2. Also, submitted that, therefore, in terms of Section 6 of the CGST Act, it is not open for respondent no.1 to commence parallel proceedings

Conversely, the revenue’s counsel submitted that the Respondent No. 1 is a GST Officer and therefore, the notification dated 01.11.2019 assigning the functions of a proper officer to the Goods and Services Tax Officer would also include the said officer with the jurisdiction to issue the impugned show cause notice under Section 73 of the CGST Act as well as to pass the impugned order cancelling the petitioner’s registration.

The bench composed of Justice Vibhu Bakhru and Justice Amit Mahajan viewed that the petitioner is not precluded from canvassing her contention that the proceedings in terms of the impugned show cause notice are not maintainable, before the concerned officer.

It was further mentioned by the bench that the petitioner is allowed to raise this objection in response to the show cause notice under dispute. It was needless to say that if such an objection is raised, the respective officer will carefully consider and examine it.

Regarding the cancellation of the GST registration, the counsel did not pursue the matter in court. However, the bench noted that the petitioner retains the right, if applicable, to approach the authorities again concerning this matter. The High Court found no ground to entertain the present petition, thus, the petition was dismissed.

To Read the full text of the Order CLICK HERE

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