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TMI Blog2025 (3) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud or misrepresentation subject to the condition that the petitioner shall be duly apprised of the material on the basis of which that opinion has been formed. Time limitation - HELD THAT:- The said issue already stands answered against the writ petitioner in light of decision in M/s Addichem Speciality LLP v. Special Commissioner, Department of Trade and Taxes [2025 (2) TMI 366 - DELHI HIGH COURT] where it was held that 'The power to condone delay caused in pursuing a statutory remedy would always be dependent upon the statutory provision that governs. The right to seek condonation of delay and invoke the discretionary power inhering in an appellate authority would depend upon whether the statute creates a special and independent regime with respect to limitation or leaves an avenue open for the appellant to invoke the general provisions of the Limitation Act to seek condonation of delay.' Conclusion - Retrospective cancellation of GST registration requires a reasoned order, reflecting due application of mind and adherence to procedural fairness. The order of 20 March 2024 insofar as it proceeds to cancel the registration of the petitioner from a retrospective date i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace: RANGE - 164 Date: 20/03/2024 Gaurav Kumar Superintendent Ward 84" 3. The aforesaid order was preceded by the issuance of a Show Cause Notice SCN dated 01 August 2023 which reads as follows: "Show Cause 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 Section 29(2)(e)-registration obtained by means of fraud, wilful misstatement or suppression of facts You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice. You are hereby directed to appear before the undersigned on 08/08/2023 at 03:00 PM If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits. Please note that your registration stands suspended with effect from 01/08/2023 Kindly refer the supportive document attached for case specific details. Place: Delhi Date: 01/08/2023" 4. Although the record would bear out that the aforesaid SCN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntours 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 registration of the petitioner was cancelled retrospectively with effect from 01.07.2017. Petitioner also impugns Show Cause Notice dated 07.04.2022. 2. Vide impugned Show Cause Notice dated 07.04.2022, petitioner was called upon to show cause as to why the registration be not cancelled for the following reasons:- "Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months" 3. Petitioner was in the business of services involving repair, alterations, additions, replacements, renovation, maintenance or remodelling of the building covered above, General construction services of harbours, waterways, dams, water mains and lines, irrigation and other waterworks, General construction services of long-distance underground/ overland/ submarine pipelines, communication and electric power lines (cables); pumping stations and related works; transformer stations and relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent's contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 of the registration. 5. Further, the impugned order dated 15.12.2021 passed on the Show Cause Notice dated 04.09.2021 does not give any reasons for cancellation. It, however, states that the registration is liable to be cancelled for the following reason "whereas no reply to the show cause notice has been submitted". However, the said order in itself is contradictory. The order states "reference to your reply dated 15.12.2021 in response to the notice to show cause dated 04.09.2021" and the reason stated for the cancellation is "whereas no reply to notice show cause has been submitted". The order further states that effective date of cancellation of registration is 01.07.2017 i.e., a retrospective date. 6. Neither the show cause notice, nor the order spell out the reasons for retrospective cancellation. In fact, in our vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration 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. In view of the aforesaid and in light of an abject failure on the part of the authority to assign even rudimentary reasons for a retroactive cancellation, we find ourselves unable to sustain the order impugned." 7. In view of the above and when the impugned order is tested on the aforenoted precepts, it becomes apparent that in the absence of reasons having been assigned in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. We are thus of the considered opinion that the writ petition is entitled to succeed on this short ground alone. This, however, would be without prejudice to the right of the respondent to continue the SCN proceedings on the allegation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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