In a recent judgement by the Delhi High Court, the restoration of GST registration in the High Security Registration Plates case has been ordered. The court found in favor of the petitioner, highlighting the importance of proper procedures in cancellations with retrospective effect. The case sheds light on the complexities of GST regulations and the impact of such cancellations on businesses like that of the petitioner, who is in the business of supplying High Security Registration Plates.
Facts
- The registration of the petitioner was cancelled retrospectively as of 27.07.2022.
- The cancellation was based on certain grounds that were found valid by the court.
- The petitioner’s registration status was affected by this cancellation.
Analysis
- Petitioner challenges the cancellation of GST registration with retrospective effect by High Security Registration Plates 14.05.2020.
- GST registration can only be cancelled with retrospective effect if deemed fit by the proper officer based on objective criteria.
- Petitioner discovered the cancellation when trying to file GST returns for August 2022.
- One consequence of retrospective cancellation is denial of input tax credit to taxpayer’s customers for the affected period.
- Petitioner couldn’t respond to Show Cause Notice as accountant had left and petitioner was unaware of proceedings.
- Petitioner is in the business of supplying High Security Registration Plates and had GST registration under the Central Goods and Services Act, 2017.
- A taxpayer’s registration can be cancelled with retrospective effect only if intended and warranted
- Proper officer must also cancel GST registration with retrospective effect if necessary
Decision
- Petitioner’s GST registration is restored
- Petitioner must comply with Rule 23 of the Central Goods and Services Tax Rules, 2017
- Respondents have the right to take steps for recovery of any tax, penalty or interest owed by the petitioner
- Respondents can retrospectively cancel GST registration after providing notice and an opportunity for hearing
Case Title: M/S ROSMERTA HSRP VENTURES PRIVATE LIMITED Vs. UNION OF INDIA & ORS. (2024:DHC:4424-DB)
Case Number: W.P.(C)-1061/2024
