In a significant legal development, the Delhi High Court has delivered a judgement on the retrospective cancellation of GST registration. The case involved issues surrounding compliance and filing requirements under Rule 23 of the Central Goods and Services Tax Rules, 2017. This judgement has implications for taxpayers and authorities alike, setting guidelines on when cancellation can be done retrospectively. Stay informed with our analysis on this case!
Facts
- The registration of the petitioner was cancelled retrospectively from 01.07.2017.
- The petitioner has also challenged the Show Cause Notice dated 11.10.2021.
- The retrospective cancellation has been a key point of contention in this case.
Analysis
- Petitioner must fulfill all necessary compliances and file required returns as per Rule 23 of the Central Goods and Services Tax Rules, 2017.
- Respondents retain the right to take action for the recovery of any outstanding tax, penalty, or interest, including retrospective cancellation of GST registration after providing proper notice and a chance for a hearing.
- The petition is concluded under the specified conditions.
- Non-filing of returns for a certain period does not imply a sustained status for the taxpayer and is therefore rejected.
- Under Section 29(2) of the Central Goods and Services Tax Act, 2017, the GST registration can be canceled by the proper officer from a retroactive date based on the circumstances outlined in the sub-section, which must be objective rather than subjective.
- The Petitioner, involved in service provision, contracting, and trading of air conditioning machines, received a notice to show cause on 11/10/2021 and did not respond adequately by the date mentioned in the reply dated 07/01/2022, leading to the stated reasons for retrospective cancellation.
Decision
- The GST registration of the petitioner has been restored.
- Cancellation can only be done if deemed fit by the proper officer.
- Cancellation cannot be done with retrospective effect mechanically.
Case Title: VISIONTEK ENGINEERS Vs. COMMISSIONER OF SGST DELHI & ANR. (2024:DHC:4436-DB)
Case Number: W.P.(C)-6729/2024
