The Delhi High Court has ruled that the Goods and Service Tax (GST) registration cancellation, once reversed on the same grounds, is not legally valid.
The petitioner in the case, M/S Samayshristi Enterprises, questioned the decision taken by the respondent, which cancelled their GST registration effective from the registration date, 20.03.2021. The cancellation order was based on a Show Cause Notice (SCN) dated 18.09.2023, where the respondent alleged that the petitioner obtained registration in a fraudulent manner, wilful misstatement, or concealing facts.
The petitioner was given seven working days to be prepared to give a response to the SCN and was required to present before the officer on 25.09.2023. Additionally, the petitioner’s GST registration was suspended from the date of the SCN, i.e., 18.09.2023.
The SCN did not specify the exact grounds for initiating the cancellation of the petitioner’s GST registration. Even though it mentioned allegations of fraud, wilful misstatement, or suppression of facts, it did not furnish any details concerning the specific fraudulent activity or misstatement presented by the petitioner.
The allegations of suppressed facts by the petitioner were not clarified in the SCN. According to established legal principles, a show cause notice should clearly address the allegations forming the basis for adverse action. In this case, the contended order solely referred to the SCN without providing further details.
The petitioner had applied for the revocation of the cancellation of their GST registration in accordance with a circular dated 31.03.2023. The application was approved, and the petitioner’s GST registration cancellation was reversed through an order dated 16.09.2023.
A panel consisting of Justice Vibhu Bakhru and Justice Amit Mahajan emphasized that once the petitioner’s GST registration cancellation was reversed, following its earlier cancellation due to allegations of fraud, misstatement, or suppression of facts, it was not permissible for the respondent to cancel the registration again for the same grounds unless new grounds arose after the initial cancellation on 30.09.2021.
| Case Title | M/S Samayshristi Enterprises VS GST Division, New Delhi |
| Citation | W.P.(C) 14596/2023 & CM APPL. 58035/2023 |
| Date | 08.11.2023 |
| Petitioner | Mr. Pulkit Verma & Mr. Peyush Pruthi, Advs |
| Respondent | Mr. Akshay Amritanshu, SSC with Mr. Ashutosh Jain & Ms. Anjali Kumari, Advs |
| Delhi High Court | Read Order |
