In a significant ruling by the Delhi High Court, a case regarding the retrospective cancellation of GST registration has been decided. The judgment sheds light on the proper procedures and considerations involved in such cases, impacting both taxpayers and tax authorities. Learn more about this landmark decision and its implications for businesses in the GST regime.
Facts
- The registration of the petitioner was cancelled retrospectively with effect from 5th
- The cancellation was primarily based on the violation of certain specified regulations
- The petitioner failed to provide a satisfactory explanation for the violations
- The retrospective nature of the cancellation was justified by the severity of the violations
- The cancellation decision was made after due consideration and proper adherence to legal procedures
Analysis
- Registration cannot be cancelled with retrospective effect mechanically.
- Cancellation of registration can only be done if the proper officer deems it fit based on objective criteria.
- Mere non-filing of returns for a period does not necessitate retrospective cancellation of registration covering compliant periods.
- Intent and warranted consequences must be considered for cancelling registration with retrospective effect.
- The consequence of cancelling registration with retrospective effect includes denial of input tax credit to the taxpayer’s customers.
- The notice for cancellation did not specify cogent reasons, merely mentioned a violation without proper explanation.
- Proper officer may cancel registration from a retrospective date if specific circumstances mentioned in Section 29(2) of the Act are satisfied.
- The Petitioner does not seek to carry 30.11.2022 as the date of cancellation of GST registration.
- The registration shall now be treated as cancelled with effect from 25.04.2022, the date when the Petitioner filed an application seeking cancellation of GST registration.
Decision
- Respondents have the right to recover any tax, penalty, or interest due from the subject firm in accordance with the law.
- Retrospective cancellation of GST registration may be done after providing proper notice and a personal hearing to the Petitioner.
- Petitioner must fulfill the compliances required by Section 29 of the Central Goods and Services Tax Act, 2017.
- The petition is resolved with the above terms.
Case Title: RAVI PARKASH GOEL, PROPRIETOR OF M/S. GOPISH PHARMA Vs. SALES TAX OFFICER CLASS II/AVATO, WARD 71, DELHI & ANR. (2024:DHC:4205-DB)
Case Number: W.P.(C)-5264/2024
