SHREE SHYAM METALS vs THE COMMISSIONER OF GOODS AND SERVICE TAX DELHI EAST & ANR.
$~4.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 21.12.2023
+ W.P.(C) 14120/2023 and CM APPL. 55847/2023
SHREE SHYAM METALS ….. Petitioner
Through: Mr. Rajesh Mahana, Mr. Ramanand Rai, Mr. Mayank Kouts and Mr. Shiva Narang, Advocates.
versus
THE COMMISSIONER OF GOODS AND SERVICE TAX DELHI EAST & ANR. ….. Respondents
Through: Ms. Arunima Dwivedi, Sr. Standing Counsel with Ms. Pinky Pawar, Advocate.
CORAM:
HON’BLE MR. JUSTICE VIBHU BAKHRU
HON’BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA
VIBHU BAKHRU, J.
1. The petitioner has filed the present petition impugning an order dated 31.12.2023 (hereafter the impugned order), whereby the petitioners GST registration was cancelled with retrospective effect from 01.01.2019. The impugned order was passed pursuant to a show cause notice dated 29.09.2022 (hereafter the SCN), whereby the petitioners GST registration was proposed to be cancelled for the following reasons:
The DDGST VIDE ITS LETTER DATED 20.09.2022 ISSUED CIDE F. No. DGGI/GZU/GR-H/INV/291/22-23/14255 HAS INFORMED THAT THE PARTY IS NON EXISTENT
2. The petitioner was called upon to respond to the said SCN within a period of seven working days from the date of the SCN and to appear before the proper officer on 03.10.2022. Additionally, the petitioners GST registration was suspended with effect from the date of the SCN, that is, 29.09.2022.
3. The SCN has not been placed on record but a copy of the same has been handed over by the learned counsel for the respondent.
4. The petitioner claims that a copy of the letter referred to in the SCN was not provided to the petitioner.
5. The petitioner states that he had applied for cancellation of the GST registration on 08.02.2021 with effect from the said date, as the petitioner had closed its business.
6. Pursuant to the said application, respondent no. 2 had issued a notice dated 09.02.2021 seeking certain additional information and clarification. Since the petitioner did not respond to the same, the petitioners application for cancellation of the registration was rejected by an order dated 23.02.2021.
7. The petitioner states that it once again applied for cancellation of its GST registration by an application dated 16.09.2021. This time the petitioner sought cancellation of its GST registration with effect from 31.08.2021. The respondents issued another notice dated 27.09.2021 seeking further information. However, the petitioner claims that the said notice was never served on the petitioner. The petitioner also contends that the said notice was beyond the stipulated period of time and, therefore, it was not permissible for the respondents to issue the same.
8. Since the petitioner did not respond to the notice dated 27.09.2021, the petitioners application for cancellation of its GST registration was rejected by the concerned officer on 18.10.2021.
9. The petitioner is not aggrieved by the cancellation of its GST registration, but is aggrieved by the cancellation being effective with the retrospective date, that is, from 01.01.2019. It is the petitioners case that it closed its business on 08.02.2021. Accordingly, the petitioner claims that the GST registration was required to be maintained for the period with effect from 01.01.2019 to 08.02.2021.
10. As noted above, the SCN referred to a letter dated 20.09.2022 purportedly informing the concerned officer that the petitioner was non-existent. Admittedly, a copy of the said letter was not forwarded to the petitioner. Thus, the petitioner had no knowledge as to why the petitioner was being considered as non-existent.
11. The impugned order cancelling the petitioners GST registration indicates the following reasons for doing so:
1. The registration has been cancelled as per the request letter received from DGGSTI. Further, the cancellation of Registration does not absolve the taxpayer from the liability, if any, raised in future.
12. It is settled law that an authority which is charged with performing a statutory duty has to independently satisfy itself of the reasons for taking such decisions. It is trite law that such authority cannot act on the dictation of another authority.
13. In the present case, the impugned order does not indicate any reason for cancellation of the petitioners GST registration with the retrospective date, that is, from 01.01.2019. More importantly, the SCN also did not mention that the petitioners GST registration was proposed to be cancelled with retrospective effect from 01.01.2019. Thus, the petitioner was provided no opportunity to contest the cancellation of the GST registration with retrospective effect. Since, the petitioner had filed an application for cancellation of its GST registration, it was not averse to cancellation of its GST registration prospectively, and, therefore, had no reason to contest the SCN.
14. There is also no material on record to indicate that the petitioner was non-existent as on 01.01.2019 or at any time prior to 08.02.2021.
15. In view of the above, this Court considers it appropriate to direct that the impugned order cancelling the petitioners GST registration be effective from 08.02.2021. However, it is clarified that in the event the respondents seek to cancel the petitioners GST registration with a retrospective date prior to 08.02.2021, the proper officer will issue a show cause notice clearly setting out its reasons for proposing any such action and pass such an order as it deems fit after affording the petitioner a sufficient opportunity to be heard.
16. It is also clarified that this order will not preclude the respondents from initiating or pursuing any proceedings for any statutory violation on the part of the petitioner or for recovery of any tax or any other amount that may be due from the petitioner in accordance with law.
17. The petition is disposed of in the aforesaid terms.
VIBHU BAKHRU, J
ANOOP KUMAR MENDIRATTA, J
DECEMBER 21, 2023
aks
W.P.(C) 14120/2023 Page 1 of 1