GSTIN Cancelled Without Reason: Delhi High Court Orders Reconsideration and Revocation

The Delhi High Court has ordered a review of the request to change the Goods and Services Tax (GST) registration and reverse the cancellation of the petitioner’s registration. The court found that both applications were disapproved without stating any explanation.

The petitioner, a company called M/S Sai Aluminium Exim is the applicant in this case and Mr. Pranay Jain is the representing counsel of the company. Mr Karan sought the intervention of the High Court to challenge the revocation of GST registration.

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Mr Arnav Kumar, Mr Aranya Sahay, and Mr Gurdas Khurana appeared on behalf of the respondent revenue, the PR Commissioner of Goods and Service Tax North Delhi.

The main reasons stated by the petitioner for the challenge were the revocation of their request to amend the registration under GST and the subsequent revocation of the registration.

It is stated by the petition that they modified their primary business address in 2022 and submitted an application on June 11, 2022, to update this information. However, the application was rejected on May 9, 2023, due to the non-submission of the required information.

Resultantly, a Show Cause Notice (SCN) was issued to the petitioner on September 1, 2023, proposing the revocation of their GST registration under Section 29(2)(e) of the GST Act, 2017, on grounds of alleged acquisition of registration through deceit, deliberate misrepresentation, or concealment of facts.

The petitioner argued that the SCN lacked explicit reasons for the revocation and failed to mention the purported fraudulent activities.

Important: Cancelling GST Registration Retroactively Without a Valid Reason is Arbitrary

In its analysis, the court observed an absence of specific justifications for cancelling the registration in both the SCN and the subsequent order dated September 14, 2023, which retrospectively cancelled the registration from July 1, 2017.

The court acknowledged the inclusion of the petitioner’s name in a list provided by the Anti-Evasion Branch but noted that pertinent documents concerning the petitioner were not forwarded.

Consequently, a division bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan determined that the order of revocation of the petitioner’s GST registration was devoid of proper grounds. They subsided the decision rejecting the amendment application filed on May 9, 2023. The court directed the petitioner to submit all necessary documentation and information to the relevant officer, supporting their plea to reverse the cancellation.

The bench stressed the importance of the concerned officer verifying the petitioner’s actual business operations at the claimed primary location. If satisfied, the order cancelling the GST registration will be reversed.

The bench highlighted the importance of providing specific grounds for the cancellation of GST registrations and stressed that it is essential to provide the affected parties with an equitable opportunity to present their arguments and evidence. The petitioner has been provided with an opportunity to address the situation by submitting the necessary documents and information, ensuring a fair procedure in the ongoing proceedings.