The Delhi High Court modified the GST Cancellation order to the limited extent that registration shall now be treated as cancelled with effect from 01.10.2019 i.e., the date when Petitioner applied for cancellation of GST registration. The Petitioner surrendered the GST Registration due to loss in business.
M/S Veetrag Traders, the petitioner challenged the order whereby the appeal of the Petitioner seeking restoration of the GST registration has been dismissed solely on the ground that the same is barred by limitation. Petitioner impugned the order dated whereby the GST registration of the petitioner was cancelled retrospectively with effect from 01.07.2017 and also impugned Show Cause Notice dated 13.08.2020.
Vide Show Cause Notice The petitioner was called upon to show cause as to why the registration be not cancelled for the following reason:- “Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months”
Petitioner is a trading firm and is engaged in the business of selling craft paper and possesses GST registration. Petitioner had submitted an application seeking cancellation of GST registration dated 01.10.2019 on the grounds of closure of business.
Under the said application, notice was given to the Petitioner on 11.04.2020 seeking additional information and documents relating to the application for cancellation of registration. On account of an unsatisfactory reply, an order dated 16.06.2020 was passed rejecting the application for cancellation merely stating “Application rejected by the provisions of the Act”.
A Show Cause Notice was issued to the petitioner. Though the notice does not specify any cogent reason, it merely states “Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months”. 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.
Counsel for Petitioner submitted that due to loss in business, Petitioner had closed all business activities and asked his consultant to surrender the said GST registration. He further submitted that the Petitioner received a notice seeking additional information and documents relating to the application for cancellation of registration, however, due to the COVID-19 pandemic the notice was missed by the Petitioner and his consultant.
He further submitted that the Petitioner was unaware of the legal proceedings as the consultant of the Petitioner expired due to Coronavirus and hence could not file a reply or his GST returns due to lack of knowledge about GST procedure.
Justice Sanjeev Sachdeva And Justice Ravinder Dudeja viewed that the Show Cause Notice and the impugned order are also bereft of any details. Accordingly the same cannot be sustained and neither the Show Cause Notice nor the order spell out the reasons for retrospective cancellation.
The Court modified the impugned order to the limited extent that registration shall now be treated as cancelled with effect from 01.10.2019 i.e., the date when Petitioner applied for cancellation of GST registration. The petitioner shall make the necessary compliances as required by Section 29 of the Central Goods and Services Tax Act, 2017.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
