The Delhi High Court set aside cancellation of GST Registration as there was non satisfaction of conditions set out in Section 29(1) or 29(2) of the Central Goods and Service Tax (CGST) Act, 2017.
The petitioner was called upon to file the reply within seven working days from the date of service of the impugned show cause notice (SCN) and was also directed to appear before the Proper Officer on 27.09.2022. Additionally, the petitioner’s GST registration was suspended with effect from the date of the impugned SCN. The petitioner’s GST registration was, thereafter, cancelled by an order dated 11.07.2023 with retrospective effect from 30.11.2020. The reasons for the cancellation as set out in the said order read as: “Others”.
Section 29 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) enables a Proper Officer to cancel a dealer’s GST registration in certain circumstances. Sub-section (1) of Section 29 of the CGST Act set out the circumstances in which a taxpayer’s GST registration can be cancelled. Sub-section (2) of Section 29 of the CGST Act specify the circumstances in which the registration can be cancelled from such date, including with retrospective effect, as the proper officer considers fit.
A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “In the present case, it is noticed that the impugned SCN was issued solely on the basis of a letter received from another authority. The said letter is neither attached to the impugned SCN nor does the impugned SCN refers to the contents thereon. 13. The impugned order, as stated above, does not indicate that the Proper Officer was satisfied as to any of the conditions as set out in Section 29(1) or 29(2) of the CGST Act.”
“In view of the above, the present petition is allowed. The impugned order, cancelling the petitioner’s GST registration, is set aside and the respondents are directed to forthwith restore the same” the Court concluded.
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