Ashish Garg Proprietor Vs Assistant Commissioner of State Goods And Service Tax (Delhi High Court)
The Hon’ble Delhi High Court in the matter of Ashish Garg v. Assistant commissioner of State goods and services Tax [W.P.(C) 6652 of 2023 dated July 20, 2023] held that although Revenue department has discretion to cancel GST registration from a retrospective date but doing so without valid justification constitutes the arbitrary exercise of power.
Facts:
Ashish Garg (“the Petitioner”) decided to discontinue the business due to medical issue. Accordingly, on July 20, 2019 the Petitioner filed the application for cancellation of GST registration.
The Revenue Department (“the Respondent”) issued notice on March 23, 2020 seeking the additional document for processing the registration cancellation application and thereafter vide an Order dated June 28, 2021 rejected the Petitioner’s application for cancellation of registration.
Thereafter, the Respondent issued a show cause notice to the Petitioner on June 30, 2021 (“the SCN”) to cancel the GST registration of the Petitioner on the ground that Petitioner had not filed GST returns for continuous period of six months. Later, the GST registration was suspended w.e.f. June 30, 2021.
Vide an Order dated July 22, 2021 (“the Impugned Order”) the Adjudicating Authority cancelled the GST registration of the Petitioner with retrospective effect from July 02, 2017.
Aggrieved by the Impugned order the Petitioner had filed the writ before the Hon’ble Delhi High Court.
The Petitioner submitted that they have regularly filed GST return till June, 2019, thus registration cannot be cancelled from a date before June, 2019 otherwise it would impact the other taxpayers, who had received supplies from him.
Issue:
Whether the Revenue Department can cancel GST registration from a retrospective date, even before the date of filing of application for cancellation by Petitioner?
Held:
The Hon’ble Delhi High Court in W.P.(C) 6652/2023 held as under:
