In a recent case, the Delhi High Court while modifying the retrospectively canceled Goods and Service Tax ( GST ) registration held that no opportunity was given to the petitioner for objecting to the retrospectively canceled GST registration.
The petitioner Anil Soni Properator Of M/S. Soni Sales Corp filed the writ petition against the GST registration of petitioner has been canceled retrospectively with effect from 02.07.2017.
Petitioner was engaged in the business of trading of rubber and rubber chemicals and possessed GST registration.
As per the Show Cause Notice dated 26.05.2022 was issued to the Petitioner seeking to cancel its registration. Though the notice does not specify any cogent reason, it merely states “Others”.
The order states that the effective date of cancellation of registration is 02.07.2017 i.e., a retrospective date. There is no material on record to show as to why the registration is sought to be canceled retrospectively.
Puneet Rai,Counsel for the petitioner submitted that the petitioner is no longer interested in continuing business and has closed down all business activities.
Anurag Ojha, Counsel for the respondent submits that one of the consequences for canceling a tax payer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period.
The court during the adjudication observed that the notice that the Show Cause Notice and the impugned order are 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.
Further, the said Show Cause Notice also does not put the petitioner to notice that the registration is liable to be canceled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration
Subsequently the Petitioner does not seek to carry on business or continue the registration, the impugned order dated 08.06.2022 is modified to the limited extent that that registration shall now be treated as canceled with effect from 08.06.2022 i.e., the date of the order for cancellation of registration.
Further the bench clarified that cRespondents are not precluded from taking any steps for recovery of any tax, penalty or interest that may be due in respect of the subject firm in accordance with law including retrospective cancellation of the GST registration.
After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja modifying the retrospectively canceled Goods and Service Tax ( GST ) registration and observed that no opportunity was given to the petitioner for objecting to the retrospectively canceled GST registration.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
