Delhi HC: GSTIN Cancelled Without a Hearing and Proper Explanation Not Tenable

The respected Delhi High Court, in the matter of M/s. Att SYS India Pvt. Ltd. Estex Tele Pvt. Ltd. Consortium v. Commissioner of Goods and Service Tax [W.P. (C) 14494/2023 dated November 20, 2023], granted the writ petition and instructed the Revenue Department to restore the Petitioner’s GST Registration that they have revoked. The court held that cancelling the GST Registration without providing any opportunity for a hearing and proper justification is not valid.

Key Facts Related to the Case

The petitioner, M/s. Att SYS India Pvt. Ltd. Estex Tele Pvt. Ltd. Consortium is a group of individuals formed by ATT SYS India Pvt. Ltd. and Estex Tele Private Limited to carry out the contract given by the company, Indian Highway Management Company Limited for conducting traffic surveys on National Highway. The Petitioner obtained GST registration in 2017.

The Company terminated the contract awarded to the Petitioner. As a result, the Company decided to resolve the dispute through arbitration, and the Arbitral Tribunal ordered the Company to compensate the Petitioner. As the Petitioner was not involved in any other business, they were filing Nil returns.

After receiving the awarded amount, the Petitioner was required to fulfil their GST liability. However, upon examining the portal, the Petitioner discovered that their GST registration had been cancelled through an order dated December 26, 2020 (“the Impugned Order”) by the Revenue Department, the respondent in this case.

As a result, the Petitioner faced difficulties in submitting GST Returns and had unintentionally paid an excess of Rs. 14.90 Lakhs in GST.

The Matter Goods and Services Tax Registration

Is it legally acceptable to cancel GST Registration without providing a fair hearing and proper justification?

Important:- Delhi HC Quashes Tax Notice Issued Before the Resolution Plan was Approved

Delhi High Court’s Ruling

In the case of W.P. (C) 14494/2023, the Delhi High Court made the following observations and ruled accordingly-

• It was noted that the date and time for a personal hearing were not mentioned in the copy of the Show Cause Notice (“the SCN”). Therefore, the Petitioner was not allowed to contest the SCN.
• It was further observed that the Impugned Order lacked reasoning and failed to provide grounds for cancelling the Petitioner’s GST registration.
• The court expressed the opinion that the Impugned Order, which cancelled the GST Registration, was void and violated the principles of Natural Justice.
• It was held that the Impugned Order was invalid and set aside. Consequently, the Writ Petition was granted.
• The court directed the Respondent to restore the Petitioner’s GST Registration. Additionally, the Petitioner was instructed to comply with the statutory provisions by filing returns following the law.

Also Read:- Delhi High Court Directs Officials for GST Refund to Petitioner Paid Under Pressure