Retrospective Cancellation of GST Registration for Non-Existence at Principal Place after Rejection of Amendment Application: Delhi HC remands Matter [Read Order]

The High Court of Delhi has set aside the retrospective cancellation of GST registration of M/s. Abhishek Appliance Pvt. Ltd. citing procedural lapses and the need for a fair opportunity for the petitioner to present their case. The decision came in response to the petition filed by the company challenging the order issued by the Superintendent of the CGST-Delhi North Commissionerate.

An inspection was conducted by the Anti Evasion Branch on January 12, 2024, which revealed that the petitioner’s principal place of business at Mahendru Enclave, North-West Delhi, was non-existent. The site was found to be under construction, with workers unaware of the petitioner’s business operations. The workers informed the officials that the building had been under construction for over two years. The officials attempted to contact Mr. Ayush Gupta, a representative of the petitioner company, who informed them that he had applied for a change of the principal place of business, but the application was rejected by the GST Officer.

The petitioner, represented by Ms. Anjali Jha Manish, Mr. Priyadarshi Manish and Ms. Divya Rastogi argued that the Show Cause Notice ( SCN ) was issued solely based on a letter from the Anti Evasion Branch of the Delhi North Commissionerate, without the proper officer independently verifying the grounds for cancellation.

It was also argued that the SCN did not provide adequate details or time for the petitioner to respond, rendering the hearing a mere formality.

The petitioner highlighted that the GST registration also listed an additional place of business at Chand Bagh, East Delhi, which was not inspected. They also asserted that the company had applied for a change of address on February 6, 2024, which was approved the following day, and an amended registration certificate was issued. Despite these facts, the GST registration was cancelled with retrospective effect from July 2, 2017.

The respondent revenue, Assistant Commissioner, CGST-Delhi North Commissionerate and others, represented by Mr. Atul Tripathi and Mr. V.K. Attri, contended that the petitioner’s GST registration was rightly cancelled due to non-existence at its principal place of business, as confirmed by the Anti Evasion Branch’s inspection and subsequent findings.

The bench noted the procedural deficiencies in the issuance of the SCN and the cancellation order. The court observed that the petitioner was not given a fair opportunity to respond to the allegations and that the cancellation was based solely on the non-response to the SCN. The bench stressed the importance of ensuring due process and fair hearing in administrative actions affecting businesses.

The court emphasised that the petitioner should be allowed to explain the circumstances leading to the non-existence at the principal place of business and provide evidence of its business operations from the alternate location.

The petitioner was directed to file a comprehensive response to the allegations along with supporting documents within ten days and was granted a personal hearing before the Proper Officer.

In conclusion, the division bench of Justice Vibhu Bakhru and Justice Sachin Datta set aside the order and directed the proper officers to make an informed decision after considering the petitioner’s explanations and evidence. The petition and all pending applications were disposed of.

To Read the full text of the Order CLICK HERE

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