In a groundbreaking decision, the Supreme Court of India has ruled on a case regarding the cancellation of GST registration. The judgement, which impacts both the taxpayer and the tax authority involved, sets a precedent for future similar cases. This case explores the implications of retrospective cancellation and the importance of providing reasons for such actions. Stay updated on this significant legal development! #GSTLaw #SupremeCourt #LegalJudgement
Analysis
- The GST registration of the Petitioner was issued a Show Cause Notice dated 19.09.2019 without providing any reasons for cancellation.
- Cancellation of a taxpayer’s registration with retrospective effect can only be done if intended consequences are warranted.
- The lack of reasons for retrospective cancellation in the notice is highlighted.
- Both the Petitioner and the respondent seek cancellation of the GST registration, albeit for different reasons.
- Section 29(2) of the Act allows the proper officer to cancel GST registration, but cancellation with retrospective effect must be justified.
- The retrospective cancellation of the Petitioner’s GST registration is deemed unsustainable based on the given circumstances.
Decision
- The Petitioner’s request to cancel registration from 04.10.2019 is modified to be effective from 19.09.2019, the date of issuance of the Show Cause Notice.
- Cancellation of GST registration can still be done retrospectively after issuing a proper Show Cause Notice and following natural justice principles.
- Respondents are allowed to take steps for recovery of due tax, penalty, or interest in accordance with the law.
- The Petition is disposed of based on the above modifications.
- The Petitioner must comply with the requirements of Section 29 of the Central Goods and Services Tax Act, 2017.
Case Title: SHREE BANKEY BIHARI TARDING COMPANY Vs. PRINCIPAL COMMISSIONER OF DEPARTMENT OF TRADE AND TAXES AND ANR. (2024:DHC:4375-DB)
Case Number: W.P.(C)-6727/2024
