In a recent judgment by the Delhi High Court, the case regarding GST registration cancellation has been resolved. The petitioner and respondent involved in the matter have reached a decision, impacting the taxation proceedings. Stay informed about the implications of this significant legal development.
Analysis
- GST registration cannot be cancelled with retrospective effect mechanically.
- Proper officer may cancel GST registration retrospectively if conditions under Section 29(2) of the Act are satisfied.
- Cancellation with retrospective effect should be based on objective criteria, not subjective satisfaction.
- Taxpayer’s registration can be cancelled with retrospective effect only if consequences are intended and warranted.
- Cancellation of registration with retrospective effect can deny input tax credit to taxpayer’s customers.
- Revocation of cancellation rejected due to lack of supporting documents as per notification 03/31-3-2023.
- Cancellation of registration can only be done if the proper officer deems it fit to do so.
- Both the Petitioner and the Respondent desire the cancellation of GST registration.
- The registration is now considered cancelled with effect from 31.01.2022, the date when the Show Cause Notice for cancellation was issued.
Decision
- Petitioner must comply with Section 29 of the Central Goods and Services Tax Act, 2017.
- Respondents have the right to take steps for recovery of any tax, penalty, or interest that may be due for the subject firm.
- Respondents can retrospectively cancel GST registration after issuing a proper Show Cause Notice and granting an opportunity for hearing to the petitioner.
Case Title: N K INDUSTRIES THROUGH ITS PARTNER MR NEERAJ KATYAL Vs. COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND ANR (2024:DHC:4087-DB)
Case Number: W.P.(C)-1185/2024
