Case Law Details
Sant Ram Vs Delhi State GST & Ors (Delhi High Court)
Introduction: In a significant ruling, the Delhi High Court intervened in the case of Sant Ram, setting aside the cancellation of GST registration by the tax authorities. The court scrutinized the show cause notice and subsequent order, emphasizing the necessity for the Proper Officer to independently assess conditions laid out in Section 29(1) or 29(2) of the Central Goods and Services Tax Act (CGST Act).
Detailed Analysis: Sant Ram filed a writ petition challenging a Show Cause Notice (SCN) dated September 2022, proposing the cancellation of GST registration. The notice, based on a letter from the Deputy Commissioner, cited vague reasons, and the petitioner was given a limited time to respond. Subsequently, the GST registration was canceled through an order with retrospective effect from November 30, 2020, without specific grounds.
The court, referring to Section 29 of the CGST Act, highlighted the circumstances under which the Proper Officer can cancel GST registration. Section 29(1) outlines conditions such as business discontinuation, transfer, amalgamation, or changes in business constitution. Section 29(2) allows cancellation for specific contraventions, non-filing of returns, non-commencement of business after voluntary registration, and instances of fraud.
The court noted that the Proper Officer must independently assess and satisfy the conditions in Section 29(1) or 29(2) before canceling registration. In this case, the show cause notice lacked specific reasons, and the subsequent order did not indicate satisfaction regarding statutory violations as required by law.
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