No Chance Given for Complaint to Petitioner: Delhi HC Revises Retrospectively Cancelled GSTIN

Delhi High Court while changing the retrospectively cancelled Goods and Service Tax ( GST ) registration ruled that no chance was provided to the applicant for objecting to the retrospectively cancelled GST registration.

The applicant Anil Soni Properator Of M/S. Soni Sales Corp filed the writ petition against the GST registration of the applicant has been cancelled retrospectively on 02.07.2017.

The applicant was in the business of trading rubber and rubber chemicals and secured the GST registration.

The applicant was issued with the show cause notice on 26.05.2022 asking to cancel its registration. But the notice does not cite any cogent answer it just specifies others.

The order cites that the effective cancellation of registration date is 02.07.2017 i.e. a retrospective date. No material on record is there to specify why the enrollment asks to be cancelled retrospectively. Counsel for the applicant Puneet Rai furnished that the applicant is no longer interested in continuing business and has discontinued all activities of business.

Counsel for the respondent Anurag Ojha furnished that one of the consequences of cancelling the registration of the taxpayer with retrospective effect is that the client of the assessees refuses the claim of ITC concerning the supplies incurred via the taxpayer in such duration.

The notice that the SCN and the impugned order are bereft of any particulars accordingly cannot be supported. Neither the SCN nor the order spell out the reasons for retrospective cancellation, the court witnessed at the time of adjudication.

The stated SCN does not place the applicant to notice that the registration is obligated to be cancelled retrospectively. The applicant as per that does not have any chance to even object to the retrospective cancellation of the registration.

Read Also: Cancelling GST Registration Retroactively Without a Valid Reason is Arbitrary

The applicant does not ask to carry on business or continue the registration, the impugned order on 08.06.2022 is altered to the finite extent that that registration will now be deemed as cancelled w.e.f 08.06.2022 which is the order date for cancellation of registration.

The bench explained that Respondents are not prevented from going with any measures of recovery of any tax, penalty, or interest that might be due in respect of the subject firm following law including retrospective cancellation of the GST registration.

A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja posted investigating the facts and arguments of both parties, modifying the retrospectively cancelled Goods and Service Tax ( GST ) registration and marked that no chance was provided to the applicant for objecting to the retrospectively cancelled GST registration.