The Delhi High Court held that the department is not precluded from cancelling the petitioner’s registration retrospectively from the date of registration, if there is any material to establish that the petitioner had not carried on any business after securing the GST Registration.
The petitioner applied for cancellation of registration from 20-11-2020. The cancellation application for registration was rejected on the ground that the petitioner did not reply to the notice issued for further clarification from the petitioner. Thereafter, the respondent issued a show cause notice dated 16.02.2021 proposing to cancel the petitioner’s registration for the reason that “the taxpayer found not functioning / non-existing at the principal place of business”.
Due to severe illness of the petitioner, the petitioner therefore, neither responded to the said show cause notice nor appeared before the concerned officer. The petitioner’s GST Registration was cancelled by an order dated 02.11.2021 with retrospective effect from 01.07.2017. The petitioner is not aggrieved by cancellation of his GST Registration; he is aggrieved because the registration has been cancelled with retrospective effect from 01.07.2017.
The court held that the show cause notice dated 16.02.2021 calling upon the petitioner to show cause why his GST Registration not be cancelled, did not indicate that the concerned officer had proposed to cancel the same with retrospective effect. The show cause notice also does not indicate that any inquiries were made, which revealed that the petitioner had never existed at his declared place of business.
It is an unreasoned order and completely disregards that the petitioner had filed an application dated 20.11.2020 for cancellation of his GST Registration and disclosed that he had stopped carrying on business. Thus, as stated above, the question of the petitioner being available at the principal place of business did not arise. It follows that this could not have been the ground for cancellation of the petitioner’s GST Registration with retrospective effect.
We consider it apposite to allow the present petition and direct that the cancellation of the petitioner’s GST Registration shall be effective from 20.11.2020,” the court said.
Case Title: VIRENDER KUMAR JAIN PROP. OF M/S VIRENDRA WIRES V/s DELHI GST OFFICER, WARD 76 & ORS.