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TMI Blog2025 (1) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 cannot possibly be sustained - Petition allowed. - HON'BLE MR. JUSTICE YASHWANT VARMA And HON'BLE MR. JUSTICE DHARMESH SHARMA For the Petitioner :Mr. Abhas Mishra, Ms. Neha Singhal Mr. Hukam Chand, Advs For the Respondent : Mr. Umang Misra, Adv. for Mr. Aditya Singla, SSC ORDER 1. This writ petition has been preferred seeking the following reliefs : (a) Issue an appropriate writ, order or direction in the nature of mandamus to the Respondent for allowing the application for revocation of cancellation of their GST registration forthwith; and/or (b) Issue an appropriate writ, order or direction in the nature of mandamus against the Respondent setting aside the order for cancellation of GST Registration dated 08.01.2024; and (c) Issue an appropriate writ, order or direction in the nature of mandamus restoring the GST Registration of the Petitioner; 2. The challenge is laid to an order dated 08 January 2024 pursuant to which the registration of the writ petitioner under the Central Goods Services Tax Act, 2017 CGST Act has come to be cancelled with retrospective effect from 19 December 2018. 3. For the purposes of evaluating the challenge which stands raised, we deem it ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, the petitioner was to furnish a reply within seven working days. However, it was commanded to appear before the concerned officer the very next day, namely, 27 December 2023. Even before the petitioner could respond, the impugned order dated 08 January 2024 came to be passed. We deem it appropriate to extract the order of 08 January 2024 hereinbelow: - Form GST REG-19 [See rule 22 (3)] Reference Number: ZA070124037824O Date: 08/01/2024 To DIVYAJAIN IX/7600,G/F,R.P.NO.2, AMAR MOHALLA, OLD SEELAMPUR, GANDHI NAGAR, East Delhi, Delhi, ll003l GSTIN/ UIN :07BPLPJ8848ElZH Application Reference Number (ARN): AA0712230743479 Date: Order for Cancellation of Registration This has reference to show cause notice issued dated 26/12/2023. The effective date of cancellation of your registration is 19/12/2018. 3. It may be noted that a registered person furnishing return under sub-section (1) of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR-10 within three months of the date of this order. 4. You are required to furnish all your pending returns. 5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind. It is also necessary to observe that the mere existence of such a power would not in itself be sufficient to sustain its invocation. What we seek to emphasise is that the power to cancel retrospectively can neither be robotic nor routinely applied unless circumstances so warrant. When tested on the aforesaid precepts it becomes ex facie evident that the impugned order of cancellation cannot be sustained. 6. We note that while dealing with the right of the respondents to cancel GST registration with retrospective effect and the manner in which such power should be exercised in accordance with the statutory scheme was an issue which was noticed in Ramesh Chander vs Assistant Commissioner of Goods and Services Tax, Dwarka Division, CGST Delhi Anr.4 The Court in Ramesh Chander taking note of the contours of Section 29 had held:- 1. The petitioner impugns order in appeal dated 29.12.2023, whereby the appeal filed by the petitioner has been dismissed solely on the ground of limitation. Petitioner had filed the appeal impugning order dated 13.07.2022 whereby the GST registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. In fact, in our view, order dated 13.07.2022 does not qualify as an order of cancellation of registration. 7. As per the petitioner, the said order reflected that the GST of the Petitioner stands cancelled from 01.07.2017 even though returns thereafter have been filed by the Petitioner. 8. We notice that the show cause notice as well as the impugned order of cancellation, are themselves vitiated on account of lack of reason and clarity. The appeal has been dismissed solely on the ground of limitation. Since the very foundation of entire proceedings i.e. show cause notice and the order of cancellation are vitiated, we are of the view that no purpose would be served in relegating the petitioner to the stage of an appeal. 9. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, 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. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs Commissioner, Trade and Taxes Anr.5 wherein the following was observed:- 1. Petitioner has filed the appeal impugning order of cancellation of registration dated 15.12.2021 whereby the GST registration of the Petitioner has been cancelled retrospectively with effect from 01.07.2017. Petitioner also impugns Show Cause Notice dated 04.09.2021. 2. Vide Show Cause Notice dated 04.09.2021, petitioner was called upon to show cause as to why the registration be not cancelled for the following reason:- Collects any amount representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due 3. Petitioner was engaged in the business of Sanitary ware Products Accessories i.e., Baths, Shower, Washbasins, Seats and Cover etc. and possessed GST registration. 4. Show Cause Notice dated 04.09.2021 was issued to the Petitioner seeking to cancel its registration. However, the Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent s contention in required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. 11. It may be further noted that both the Petitioners and the department want cancellation of the GST registration of the Petitioner, though for a different reason. 12. In view of the fact that Petitioner does not seek to carry on business or continue the registration, the impugned order dated 15.12.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 04.09.2021 i.e., the date when the Show Cause Notice was issued. 13. It is clarified that Respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due in respect of the subject firm in accordance with law. 14. Petition is accordingly disposed of in the above terms. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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