2023 (8) TMI 979 - HC - GST

Cancellation of GST registration of petitioner with retrospective effect from 01.07.2017 - Assessee filed the application for cancellation of registration but failed to submit the reply to the Show Cause notice issued - petitioner was not available at the principal place of business - HELD THAT - It is important to note that the show cause notice dated 16.02.2021 calling upon the petitioner to show cause why his GST Registration not be cancelled, did not indicate that the concerned officer had proposed to cancel the same with retrospective effect. The show cause notice also does not indicate that any inquiries were made, which revealed that the petitioner had never existed at his declared place of business. The order dated 02.11.2021 cancelling the petitioner s registration also contains no reason whatsoever. It merely records that no reply was submitted to the show cause notice. It is an unreasoned order and completely disregards that the petitioner had filed an application dated 20.11.2020 for cancellation of his GST Registration and disclosed that he had stopped carrying on business. Thus, the question of the petitioner being available at the principal place of business did not arise. It follows that this could not have been the ground for cancellation of the petitioner s GST Registration with retrospective effect. It is considered apposite to allow the present petition and direct that the cancellation of the petitioner s GST Registration shall be effective from 20.11.2020 - petition allowed.

Summary

Issues involved:
The petition impugning an order of the Delhi GST Appellate Authority rejecting the petitioner's appeal against the cancellation of GST Registration. The petitioner also challenges the retrospective cancellation of GST Registration and seeks rectification of the cancellation date.

Details of the Judgment:

1. The petitioner, aged about 74 years, engaged in the business of manufacturing and trading in copper wires, sought cancellation of GST Registration due to health issues. The registration was cancelled from a retrospective date, prompting the petitioner to file an appeal.

2. The petitioner's application for cancellation was rejected on the grounds of unsatisfactory reply, despite the petitioner not submitting any reply. The order of rejection lacked reasons and was deemed erroneous as the petitioner did not file any response.

3. Medical documents were produced by the petitioner to demonstrate health issues, including a diagnosis of "carcinoma left buccal mucosa" and surgery in February 2021. Subsequently, a show cause notice was issued proposing cancellation due to non-functioning at the principal place of business.

4. The GST Registration was cancelled with retrospective effect from 01.07.2017, leading to the petitioner's appeal being rejected on the basis of being filed beyond the prescribed period. The petitioner argued that the cancellation should be effective from the date of ceasing business, i.e., 20.11.2020.

5. The Court allowed the petition, directing the effective cancellation of GST Registration from 20.11.2020. However, authorities are not precluded from recovering dues or cancelling registration retrospectively if it's proven that the petitioner did not conduct any business post-registration, subject to proper show cause notice and hearing opportunity.

This judgment highlights the importance of procedural fairness and proper reasoning in administrative decisions, ensuring that cancellations of registrations are based on valid grounds and supported by evidence, especially in cases involving health issues and cessation of business activities.