9911796707
TMI Blog2024 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ng its Goods and Services Tax registration with retrospective effect from 02 July 2017. The reliefs thus claimed was restricted to the aforesaid issue only. 3. The record would reflect that the petitioner had earlier moved an application seeking cancellation of its registration under the Central Goods and Services Tax Act, 2017 [Act] on 30 January 2021. While examining that application, the respondents had issued a notice dated 01 February 2021 requiring further details to be submitted. However, and since the petitioner failed to respond to that notice, a final order on 13 February 2021 came to be passed rejecting its application for cancellation. 4. It is thereafter that a Show Cause Notice [SCN] dated 15 January 2023 came to be issued. That notice reads as under:- "Show case Notice for Cancellation of Registration Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons: 1. returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017 Observations Failure of furnish returns for a continuous period of six months You are hereby directed to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. However, we need not go into those issues since the challenge and the present writ petition stands restricted to the retrospective cancellation of the petitioners' registration under the Act. 8. While speaking on the power that stands conferred by Section 29 of the Act, we had in Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. W.P.(C) 8061/2024 decided on 25 September 2024 held as follows:- "5. As is manifest from a reading of Section 29, clauses (a) to (e) of Section 29(2) constitute independent limbs on the basis of which a registration may warrant cancellation. While the provision does enable the respondents to cancel that registration with retrospective effect, the mere existence or conferral of that power would not justify a revocation of registration. The order under Section 29(2) must itself reflect the reasons which may have weighed upon the respondents to cancel registration with retrospective effect. Given the deleterious consequences which would ensue and accompany a retroactive cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind. It is also necessary to obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating failure to furnish returns for a continuous period of six months. The show cause notice requires the petitioner to appear before the undersigned i.e. authority issuing the notice. Notice does not give the name of the officer or place or time where the petitioner has to appear. 5. Further the order dated 13.07.2022 passed on the show cause notice does not give any reasons for cancellation of the registration. It, however, states that the registration is liable to be cancelled for the following reason "whereas no reply to notice to show cause has been submitted''. However, the said order in itself is contradictory, the order states "reference to your reply dated 16.04.2022 in response to the notice to show cause dated 07.04.2022" and the reason stated for cancellation is "whereas no reply to notice to show cause has been submitted''. The order further states that effective date of cancellation of registration is 01.07.2017 i.e. retrospective date. 6. Neither the show cause notice, nor the order spell out the reasons for retrospective cancellation. In fact, in our view, order dated 13.07.2022 does not qualify as an order of cancellation of registration. 7. As per the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly set aside. GST registration of the petitioner is restored, subject to petitioner filing requisite returns upto date. 13. It is clarified that since the petitioner could not have filed the return after the GST registration was suspended, there shall be no liability to pay any penalty or fine for delayed filing. However, this would only apply in case petitioner files an affidavit of undertaking that petitioner has not carried out any business or raised invoices or taken any Input Tax Credit after the registration was suspended with effect from 07.04.2022 i.e., the date of suspension of the registration. 14. Respondent would be at liberty to initiate appropriate proceedings in accordance with law after giving a proper show cause notice containing complete details, if so advised. Further this order would not preclude the respondent from initiating any steps in accordance with law, if it is found that the petitioner had violated any provisions of the Act. 15. Petition is disposed of in the above terms." 7. We further take note of the judgment in Delhi Polymers vs Commissioner, Trade and Taxes & Anr.5 wherein the following was observed:- "1.Petitioner has filed the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh returns thereafter have been filed by the Petitioner. 8. He further submits that the petitioner is no longer interested in continuing the business and the business has been discontinued. 9. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer's registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant. 10. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer's registration with retrospective effect is that the taxpayer's customers are denied the input tax credit availed in respect of the supplies made by the tax payer during ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
