Balaji Industries Vs Principal Commissioner CGST Delhi North Commissionerate & Anr. (Delhi High Court)
The petitioner challenged an order cancelling its GST registration with retrospective effect from 11.09.2017 and sought modification so that the cancellation would apply from March 2022, when it had ceased business operations. The petitioner had been registered under the CGST and DGST Acts since 11.09.2017 and claimed to have stopped business in March 2022, instructing its Chartered Accountant to apply for cancellation.
A Show Cause Notice (SCN) dated 24.05.2022 was issued citing non-compliance with unspecified provisions of the GST Act. The petitioner did not respond to the SCN, allegedly due to lack of access to the GST portal and non-receipt of notice. Consequently, the registration was cancelled. However, the reasons cited in the cancellation order differed from those mentioned in the SCN, and the SCN did not propose retrospective cancellation.
The petitioner’s appeal was dismissed as time-barred. Before the High Court, the petitioner did not contest the cancellation itself but objected to its retrospective effect. The Court observed that the petitioner was not given an opportunity to respond to the actual grounds for cancellation.
The respondents agreed to modify the effective date of cancellation to the date of the SCN, i.e., 24.05.2022. Accordingly, the Court directed that the GST registration be treated as cancelled from that date instead of retrospectively from 2017. The order was modified to this extent, while preserving the authority’s right to initiate proceedings for statutory violations or recovery of dues in accordance with law.
