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2023 (11) TMI 551 - HC - GSTCancellation of petitioner s GST registration - non-filing of returns for a continuous period of six months - SCN proposing to cancel the petitioner s GST registration did not set out the date for the personal hearing - HELD THAT - The impugned order does not set out any reason for cancelling the petitioner s registration except stating that no reply was received to the SCN. It is the petitioner s case that it had stopped its business in the year 2019 and applied for the cancellation of GST registration with effect from 28.11.2019. In these circumstances there are no grounds in the impugned order setting out any reason for the cancellation of GST registration with retrospective date, that is, 01.07.2017. The respondent no. 2 s decision to cancel the GST registration with retrospective date cannot be sustained. It is also material to note that the petitioner s GST registration was proposed to be cancelled on the ground that it had not furnished any return for a period of six months - it is considered apposite to direct that the cancellation of the petitioner s GST shall take effect from 28.11.2019 and not from 01.07.2017.
Issues Involved:
The judgment involves the cancellation of GST registration with retrospective effect and the procedural irregularities in the cancellation process. Cancellation of GST Registration with Retrospective Effect: The petitioner's GST registration was cancelled with retrospective effect from 01.07.2017. The petitioner had applied for cancellation on 28.11.2019 after facing adverse business conditions in 2019. The respondent issued a notice seeking additional information regarding the cancellation application, which was not responded to, leading to rejection of the application. Subsequently, another application for cancellation was filed, but the notice issued in response was deemed untimely. The final cancellation was based on the petitioner's failure to file returns for a continuous period of six months, leading to retrospective cancellation from the date of registration. The impugned order did not provide any specific reasons for the retrospective cancellation, merely stating the lack of response to the show cause notice. However, the court found that the grounds for cancellation were insufficient as the petitioner had complied with filing returns during the operational period. The court directed the cancellation to take effect from 28.11.2019, rejecting the retrospective cancellation to 01.07.2017. Procedural Irregularities in Cancellation Process: The court noted that the show cause notice proposing cancellation did not specify a date for the personal hearing and did not mention the retrospective effect of cancellation. The lack of specific reasons in the impugned order for the retrospective cancellation was highlighted. The court emphasized that the mere failure to respond to the notice could not be a valid ground for retrospective cancellation from the registration date. It was deemed unjust to cancel the registration ab initio based on a subsequent failure to file returns. Therefore, the court directed the cancellation to be effective from the date of the petitioner's application for cancellation, i.e., 28.11.2019. Additionally, the court clarified that this decision did not prevent the respondents from taking further lawful actions under the CGST Act or relevant statutes.
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