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Delhi High Court modifies the GST Registration cancellation Order where in the Notice it was mentioned as that the Petitioner is not depositing Tax with the Government but in the cancellation order there are no dues against the petitioner and the table shows nil demand.
1. Facts of the Case & Timeline: The Petitioner challenges the cancellation of its GST registration effective from 01.07.2017, issued on 10.06.2022, alongside a Show Cause Notice (SCN) dated 18.11.2021.
The SCN questioned why the Petitioner's registration shouldn't be canceled for failing to deposit collected tax amounts within three months from the due date. Despite business operations shifting to Noida in August 2021 and filing returns till 30.11.2021,
the order noted the absence of a reply to the SCN, contradictorily acknowledging a response dated 06.05.2022.
Issue:
The legality of canceling the GST registration retrospectively and without detailed reasons in the SCN and order.
Petitioner's Argument: Highlighted the lack of specifics in the SCN regarding un-deposited taxes and objected to the retrospective cancellation, stating it was conducted without an opportunity for objection.
Additionally, despite relocating business and complying with return filings till 30.11.2021, the cancellation was issued without due reasons, as acknowledged responses were disregarded.
Respondent's Argument:
Asserted the necessity of cancellation due to non-compliance but did not provide detailed reasons for the retrospective effect, an aspect criticized by the court.
Court Judgment:
The High Court found the order and SCN lacked sufficient details and rationale, especially for the retrospective cancellation. It modified the cancellation to be effective from 30.11.2021, aligning with the Petitioner's compliance in filing returns.
It also allowed the Respondents to pursue any outstanding tax, penalty, or interest dues legally.
Impact:
This judgment emphasizes the need for detailed reasons in SCNs and orders, and that retrospective cancellation of GST registration must be justified and not arbitrary. šļø
Title: Optimum Viking Satcom India Pvt. Ltd. vs Principal Commissioner Delhi Goods and Services Tax
Court: Delhi High Court
Citation: W.P.(C) 3220/2024
Dated: 04-Mar-2024