The Delhi High Court, while disposing the writ petition, has declared that the cancellation of Goods and Services Tax (GST) registration will be effective from the date of the Show Cause Notice (SCN).
The petitioner, Sandeep Kumar Khurana, son of the late Varyam Dass Khurana and a registered entity with the GST authorities, filed the present petition challenging an order dated 29.05.2020. This order retrospectively annulled the GST registration of Varyam Dass Khurana.
Late Varyam Dass Khurana, engaged in supplying building materials, regularly filed returns and claimed Input Tax Credit (ITC) until his demise on 02.01.2019. Subsequently, his son, Sanjay Khurana, took over the business, continuing the regular filing of GST returns.
Sanjay Khurana applied for the cancellation of GST registration on behalf of his late father on 17.02.2020. The application was acknowledged, and a notice seeking further information was issued by the respondent authorities. The petitioner claimed to have appeared before the authorities during the lockdown period, which was contested due to restrictions in place.
Unfortunately, Sanjay Khurana passed away on 28.04.2021. The impugned order, issued without specifying reasons, retrospectively cancelled Varyam Dass Khurana’s GST registration from 04.07.2017. Although the order lacked justification, the petitioner expressed no objection to the cancellation itself, as the business had ceased operations. The grievance lay in the retrospective nature of the cancellation, from the date of registration.
The bench, consisting of Justice Vibhu Bhakru and Justice Amit Mahajan, directed that the order cancelling the registration would take effect from 18.05.2020, the date of the Show-Cause notice. This decision aligned with the petitioner’s claim that no business activities occurred thereafter.
The court further clarified that this order did not preclude authorities from pursuing tax recovery or addressing statutory violations if any were found. Additionally, the ruling explicitly stated that it did not express an opinion on whether the petitioner was the legal heir or had any rights in the business of late Varyam Dass Khurana.
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