In a recent ruling by Delhi High Court, a petition regarding the cancellation of GST registration has been resolved. The court’s decision regarding the retrospective cancellation with effect from 06.05.2019 sets a precedent for similar cases. Learn more about the implications of this landmark judgment.
Analysis
- Cancelling a taxpayer’s registration with retrospective effect has consequences for the taxpayer’s customers who are denied input tax credit for supplies made during the cancelled period.
- Registration of the petitioner was cancelled retrospectively from 01.07.2017 and a Show Cause Notice dated 13.01.2021 was issued.
- Cancellation of registration with retrospective effect should not be done mechanically and should consider compliance history.
- Proper officer can cancel registration from a retrospective date if conditions in Section 29(2) of the Act are met, based on objective criteria.
- Cancellation must have intended consequences and be warranted, not subjective.
- The impugned Show Cause Notice lacked specifics and reasons for the cancellation.
- The Petitioner does not seek to carry 27.01.2021 and requests for cancellation of GST registration
- The registration shall be treated as cancelled with effect from 06.05.2019, the date when the Petitioner filed an application for cancellation and the registration was suspended
Decision
- Respondents can take steps for recovery of any tax, penalty, or interest due from the subject firm.
- Respondents can retrospectively cancel the GST registration after providing proper notice and a personal hearing to the Petitioner.
- Petitioner must comply with Section 29 of the Central Goods and Services Tax Act, 2017.
- Petition is disposed of with the above terms.
Case Title: KALPATRU INDUSTRIES Vs. THE COMMISSIONER SGST DELHI AND ANR. (2024:DHC:4438-DB)
Case Number: W.P.(C)-7635/2024
