GST Registration Cancellation Passed Solely For Non-Filing Of Reply: Delhi High Court Remits The Matter For Re-Adjudication

The Delhi High Court has held that GST registration cancellation passed solely for non-filing of reply is unsustainable.

The bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the matter was liable to be remitted to the proper officer for re-adjudication.

The petitioner/assessee has challenged the order by which the Show Cause Notice proposing a demand of Rs. 7,56,66,476 against the petitioner has been disposed of and a demand including a penalty has been raised against the petitioner. The order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017.

As per the Show Cause Notice, the Department has given separate headings, i.e., under declaration of output tax, excess claim of input tax credit (ITC), and ITC claimed from cancelled dealers, return defaulters, and tax non-payers.

The proper officer has opined that, despite providing another opportunity, neither an online reply has been filed nor has the petitioner appeared in person or through an authorized representative.

The petitioner contended that the GST registration of the petitioner had been cancelled retrospectively with effect from July 26, 2017.

The Department contended that if registration is cancelled retrospectively, the taxpayer cannot access the portal.

The court noted that there is merit in the contention of the petitioner that he was not served with the impugned Show Cause Notice and the order that was issued after the registration was cancelled.

The court held that the petitioner shall file a reply to the Show Cause Notice within 30 days. The Proper Officer shall re-adjudicate the show cause notice after giving an opportunity of personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the GST Act.

Counsel For Petitioner: R.P. Singh

Counsel For Respondent: Anurag Ojha

Case Title: M/S Jain Cement Udyog (Through Proprietor Sh. Sanjay Jain) Versus CBIC

Citation: 2024 LiveLaw (Del) 472

Case No.: W.P.(C) 3373/2024 & CM. APPLS. 13870/2024

Click Here To Read The Order