Delhi HC Restores GSTIN, Petitioner to File Requisite GST Returns and Payments Within 30 Days

The Delhi High Court ruled that (GST) registration could not be cancelled just because an assessee does not file returns for a certain duration. On the demise of the father of the Petitioner, the applicant has discontinued the business. The retrospective cancellation of the registration consequence in the refusal of the Input Tax Credit (ITC) for the stated period.

Raghav Arora, the applicant has contested the order in a plea whereby the plea furnished via the Petitioner has been dismissed exclusively based on limitation. Applicant filed the plea challenging the order of cancellation of registration in which the GST registration of the Petitioner was cancelled retrospectively from Petitioner also impugns SCN on 14.08.2019.

Show Cause Notice issued on the petitioner to show cause as to why the registration is not to be cancelled for the reason that “According to the report of GSTI, at the time of the visit, the firm was found non-functioning on 13.08.2019” The petition has been filed by Sh. Raghav Arora, legal heir of Late Sh. Gopal Kishan Arora, who was the proprietor of M/s Hari Gopal Steel and was engaged in the business of tubes, pipes, and hollow profiles of cast iron. He was registered under the Goods and Service Act, 2017 (‘the Act’) and claimed to have been filing GST returns regularly and making GST payments as per the law.

The father of the applicant was diagnosed with Cerebral/Brain Atrophy and has been suffering since November 2018. He said that his father did not visit the business premises regularly and did not make any sales post-November 2018 because of his illness and lapsed date of 09.03.2021. Respondent no. 1 passed the order retrospectively cancelling the GST registration of the assessees after a gap of more than 15 months. It furnished that no demand has been asked by the articulated order but the Registration was cancelled retrospectively w.e.f from 01.07.2017.

The applicant does not have any intention to operate the business further and the business has been stopped after the petitioner’s father’s demise. He is disappointed by the retrospective cancellation of the registration since the Input Tax Credit is being rejected for the stated duration.

A division bench consisting of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja remarked that both the Petitioners and the department want GST registration cancellation of the Petitioner but for a different reason.

As the applicant does not ask to carry on business or continue the registration, the Court modified the impugned order to the limited extent that registration shall now be treated as cancelled from 14.08.2019 i.e., the date when the Show Cause Notice was allocated.

Respondents are not precluded from carrying any steps to recover any tax, penalty, or interest that might be due concerning the subject firm under the law.

The petitioner was represented by Mr. Puneet Rai and none appeared for the Respondent.