In a recent case, the Delhi High Court modified retrospectively canceled Goods and Service Tax registration and observed that the respondent in the show cause notice erroneously mentioned “Non-Filing of GST returns” instead of “Non-Filing of GST registration”. Hence the bench after analyzing the show cause notice and the cancellation order modified the retrospectively canceled GST Registration.
The petitioner K.C.P India is engaged in the business of manufacturing of PVC and possesses GST Registration. Petitioner registration was canceled retrospectively with effect from 01.07.2017.By challenging this order the petitioner filed the appeal before the court.
John Matthew, counsel for the petitioner submitted that the Petitioner had submitted an application seeking cancellation of GST registration dated 06.05.2019 on the ground of closure of business.
Pursuant to the said application, Show Cause Notice dated 16.03.2020 was issued to the Petitioner seeking additional information and documents relating to application for cancellation of registration.
Thereafter, cancellation of provisional registration was passed. However, there is no reason stated thereafter. 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
Rajeev Aggarwal, Counsel for the Respondent submits that the reason mentioned in the order of cancellation appears to be erroneous, it should have been “non-filing of GST returns” instead of “non-filing of GST registration.
It was observed by the court that order dated 01.01.2021 does not qualify as an order of cancellation of registration. On one hand, it states that the registration is liable to be cancelled and on the other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand.
Hence 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.
However both the petitioner and the respondent want the GST registration to be canceled, though for different reasons.
After analyzing the facts and arguments of both parties, a division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, observed that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 01.01.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 06.05.2019 i.e., the date when the petitioner field an application seeking cancellation of GST registration.
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