GST Registration Cancelled On Allegation Of Non-Existent Entity; Delhi High Court Directs Assessee To Furnish Documents

The Delhi High Court has quashed the order cancelling the petitioner's GST registration and permitted the petitioner to respond to the Show Cause Notice, since the only allegation against the petitioner is that it was found to be non-existent.

The bench of Justice Vibhu Bakhru and Justice Sachin Datta has granted liberty to the petitioner/assessee to furnish all documents and material in support of its contention that it continues to be a valid tax entity.

The petitioner/assessee has filed the petition challenging an order passed by the respondent department, by which the petitioner's Goods and Services Tax (GST) registration was cancelled. The petitioner has challenged the Show Cause Notice pursuant to which the order was passed.

The petitioner claimed that the show cause notice was issued solely on the basis of the communication received from the other department without the proper officer being independently satisfied with the same.

The petitioner was called upon to furnish a reply within seven working days and was also directed to appear before the proper officer on April 24, 2023, at 04.10 p.m.

The petitioner did not avail of the opportunity to file a reply or appear before the proper officer. The proper officer issued the order on the basis that the petitioner was not present at the given place of business. The order notes that neither any reply in response to the impugned SCN was filed nor was there any representation on behalf of the petitioner on the appointed date.

The petitioner contended that the show cause notice could not be issued on the dictates of another authority.

The department argued that the SCN was not issued on the dictates of another officer, but due to the fact that the communication sent to the petitioner was received back with the observations to the effect that 'No such firm found'.

The petitioner contended that it had filed a reply with the SCN on April 27, 2023. The same is incorrect and is based solely on the reference to a reply dated April 27, 2023, made in the impugned order. The reference is erroneous and finds mention on account of the erroneous template used for such orders. While the opening sentence of the order indicates that it is in reference to the petitioner's reply dated April 27, 2023, in response to the impugned SCN, In fact, no reply was furnished by the petitioner, and the same is mentioned in the subsequent sentence in the impugned order.

The court noted that the petitioner's case as to why its registration was not cancelled has not been considered on merit.

The court, while disposing of the petition, directed the petitioner to file the response to the SCN along with all relevant material filed by the petitioner within a period of four weeks from the date. The proper officer shall consider the same and pass an informed decision after affording the petitioner an opportunity to be heard.

Counsel For Petitioner: Shivender Kumar Sharma

Counsel For Respondent: Shashank Sharma

Case Title: Olive Traders Versus The Commissioner, CGST

Case No.: W.P.(C) 9129/2024 & CM APPL. 37341/2024

Click Here To Read The Order