Delhi HC Quashes GST Reg. Order, Citing Lack of Evidence That Taxpayer Was Not Operating at Principal Place of Business

The Delhi High Court quoting the order cancelling the applicant’s GST registration with the retrospective effect does not show any cause except directing to the SCN, quashing the mentioned order, and allowing the applicant to furnish a reply to the show cause notice.

The Division Bench of Justice Vibhu Bakhru and Justice Sachin Datta noted that the letter sent via the Deputy Commissioner (Anti Evasion) does not furnish any details on which date the physical verification was performed. Before the proper officer, it indeed furnished no material to conclude that the applicant has never presented at the principal place of business.

Summary of Case Facts

The applicant has furnished an application asking for the cancellation of the GST registration on the foundation that has discontinued his business. The proper officer asked the applicant to show cause as to why his application must not cancelled. The related officer seeks the applicant to provide various documents which presumed to be pertinent for the ascertaining obligation of the applicant under the CGST Act/DGST Act.

The petitioner was asked to provide detailed information about their purchases by party along with E-way bills, input tax credit (ITC) claimed in GSTR-3B compared to GSTR-2A and GSTR-1, details of ITC used in GSTR-3B, and stock details as per Section 29(5) of the CGST Act as of the date immediately preceding the cancellation. The petitioner did not answer the notice, and as a result, their application to cancel their GST registration was denied.

After that, the proper officer issued the Show Cause Notice (SCN), stating that the sole reason for proposing to cancel the petitioner’s GST registration was the “non-existence” of the petitioner at their principal place of business. The High Court observed that the SCN did not propose to cancel the petitioner’s GST registration with retrospective effect.

Though a letter sent via the Deputy Commissioner (Anti Evasion), CGST West Commissionerate to the Assistant Commissioner, Janakpuri Division, CGST West was projected on the GST portal, which shows that in the physical verification performed at the premises of the applicant’s principal place of business, no firm was discovered, the Bench mentioned.

As per the stated letter that the Deputy Commissioner (Anti Evasion) sent, the Bench remarked that the proper officer was asked to start the cancellation proceedings from the registration date.

Read Also: Delhi HC Quashes GST Cancellation Order Due to Lack of Specifics in Show Cause Notice

Even though the applicant too wished to cancel his GST registration as per the closure of his business, the Bench remarked that the applicant was not satisfied with the cancellation of GST registration with retrospective effect. For these retrospective cancellations of his GST registration, not enough chance is been furnished to the applicant to answer to any proposed action, the Bench cited.

The HC set aside the order cancelling the GST registration of the applicant with retrospective effect. Meanwhile, the Delhi High Court allowed the applicant to furnish all the documents as acknowledged pertinent to prove that the applicant was present at the declared principal place of business till the business closure.

The applicant’s answer would get regarded by the proper officer and pass the order post furnishing the chance to the applicant of personal hearing as expeditiously feasible, the court mentioned.

Case Title	Singhal Singh Rawat vs Commissioner Of CGST
Citation	W.P.(C) 12590/2024
Date	12.09.2024
Counsel For Appellant	Mr Ujwal Ghai, Advocate
Counsel For Respondent	Mr Aakarsh Srivastava SC Mr Vaibhav Gupta Mr Anand Pandey, Advocates
Delhi High Court	Read Order