2024 (9) TMI 1295 - HC - GST

Cancellation of petitioner s GST registration with retrospective effect - vague SCN - violation of principles of natural justice - HELD THAT - The impugned SCN did not propose to cancel the petitioner s GST registration with retrospective effect. However, a letter dated 11.11.2022 sent by the Deputy Commissioner (Anti Evasion), CGST West Commissionerate to the Assistant Commissioner, Janakpuri Division, CGST West was projected on the GST portal. The said letter indicates that during the physical verification conducted at the premises of the petitioner s principal place of business the firm was found non-existent. In terms of the said letter, the proper officer was directed to initiate the cancellation proceedings from the date of the registration. The impugned order cancelling the petitioner s GST registration does not indicate any reason for cancelling the petitioner s GST registration except referring to the impugned SCN. The petitioner is essentially aggrieved by the cancellation of GST registration with retrospective effect - the petitioner s contention that it has not been afforded the sufficient opportunity to respond to any proposed action for cancellation of his GST registration with retrospective effect, is accepted. It is considered apposite to set aside the impugned order cancelling the petitioner s GST registration with retrospective effect and permit the petitioner to file a response to the impugned SCN assuming that the same proposed to cancel the petitioner s GST registration with retrospective effect - petition disposed off.

Summary

Issues:
Impugning Show Cause Notice and Order of GST Registration Cancellation with Retrospective Effect

Analysis:
The petitioner challenged a Show Cause Notice (SCN) and an order cancelling their Goods and Services Tax (GST) registration with retrospective effect. The petitioner had initially applied for cancellation of GST registration due to business closure. The proper officer issued a notice requesting documents to assess the petitioner's liability under the CGST Act/DGST Act. The petitioner failed to respond to this notice, leading to rejection of the cancellation application. Subsequently, a new SCN was issued citing the reason for cancellation as "Non-existent." A letter indicated physical verification found the firm non-existent, directing cancellation from the registration date. However, the letter lacked specifics on verification date or conclusive evidence of non-existence. The impugned order cancelling registration did not provide reasons apart from referring to the SCN. The petitioner contested the retrospective cancellation, claiming inadequate opportunity to respond.

The court found in favor of the petitioner, setting aside the order of retrospective cancellation. The petitioner was granted three weeks to respond to the SCN, providing relevant documents to establish existence at the declared business location until closure in November 2022. The proper officer was directed to consider the response and pass an appropriate order after a personal hearing, preferably within two months. The petition was disposed of accordingly.