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TMI Blog2025 (1) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the respondents, we note that they appear to rest their decision on a physical verification which was undertaken and on the basis of which they came to conclude that the petitioner was "bogus/non-existent". On being queried, we were informed that the respondents had in the course of physical verification found that the petitioner was not carrying on any activity from the declared and principal place of business. 4. While this is sought to be disputed by the petitioner, in our considered opinion, we need not go into the said issues since the writ petitioner is entitled to succeed on a more fundamental ground. We note that the original allegation was that the registration itself had been obtained by fraud, wilful mis-statement and suppression of facts. This would necessarily require the respondents having found a false statement or wilful misstatement having been made by the writ petitioner at the time of obtaining registration itself and thus attracting Section 29 (2)(e) of the Act. The mere fact of it being subsequently found that the petitioner was not operating from the declared place of business during the course of a subsequent physical verification, would clearly not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such manner as may be prescribed.]" 6. On an overall conspectus of the aforesaid and in the absence of any material having been relied upon which may have even remotely tended to indicate that the registration had been obtained by fraud, wilful mis-statement or suppression of facts, we find ourselves unable to sustain the order impugned. 7. Insofar as retrospective cancellation of registration is concerned, we bear in mind the following principles which had come to be laid down by us while dealing with identical questions in Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. [WP(C) 8061/2024 dated 22 September 2024], and which read as under: "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 registrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services of other prefabricated structures and constructions and possessed a GST registration. 4. A show cause notice was issued to the petitioner on 07.04.2022 Though the notice does not specify any cogent reason, there is an observation in the notice stating 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 registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice does not even state that the registration is liable to be cancelled from a retrospective date. 12. The petition is allowed. The impugned show cause notice dated 07.04.2022, order of cancellation dated 13.07.2022 and the order in appeal dated 29.12.2023 are accordingly 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand. 7. Learned Counsel for the Petitioner submits that the said order reflected that the GST registration of petitioner stands cancelled from 01.07.2017 even though 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 compli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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