The Delhi High Court quashed the show cause notice ( SCN ) as there was no specific mentioning of retrospective cancelling of GST Registration in it.
Show Cause Notice dated 29.10.2021 was issued to the Petitioner seeking to cancel its registration on the ground “any taxpayer other than composition taxpayer has not filed returns for a continuous period of six months”. The said Show Cause Notice does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration.
Thereafter, the impugned order dated 08.08.2023 passed on the Show Cause Notice dated 29.10.2021 does not give any reasons for cancellation of registration. It merely states, “Whereas no reply to the show cause notice has been submitted and whereas, the undersigned based on record available with this office is of the opinion that your registration is liable to be cancelled for following reason(s): Section 29(2)(c)- Person, other than paying tax u/s 10 failed to furnish returns for prescribed periods”.
The counsel for the petitioner submitted that the registration of the petitioner was cancelled by Impugned Order dated 11.08.2021 with effect from 30.06.2020. Pursuant to the said impugned order, an application seeking revocation of cancellation dated 01.09.2021 was filed by the petitioner whereby the registration was restored.
Thereafter, subject Show Cause Notice dated 29.10.2021 was issued and by the impugned order dated 08.08.2023, it was once again cancelled retrospectively with effect from 03.07.2017 on the ground of “Section 29(2)(c)- Person, other than paying tax under Section 10 failed to furnish returns for prescribed periods”.
A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “We notice that the impugned Show Cause Notice and the impugned order are also bereft of any details and accordingly the same cannot be sustained. Neither the impugned Show Cause Notice, nor the impugned order spell out the reasons for retrospective cancellation.”
“Although, we do not consider it apposite to examine this aspect but assuming that the respondent’s contention in required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted” the Court added.
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