Case Law Details
R. Trading Co. Proprietorship of Mr. Rajendra Kumar Bothra Through Legal Heir Sh. Mudit Bothra Vs Commissioner of Delhi Goods And Services Tax And Another (Delhi High Court)
Introduction: In a recent case before the Delhi High Court, the issue of retrospective cancellation of GST registration due to the death of the taxpayer was brought into focus. The petitioner, Mr. Mudit Bothra, legal heir of late Mr. Rajendra Kumar Bothra, challenged the cancellation order issued by the Commissioner of Delhi Goods and Services Tax.
Detailed Analysis: The crux of the matter revolves around the non-filing of GST returns following the demise of Mr. Rajendra Kumar Bothra. The petitioner argued that since the taxpayer passed away, no returns were filed after April 2021. Consequently, the Assistant Commissioner issued a show cause notice and subsequently cancelled the registration retrospectively from July 2017.
The High Court analyzed the provisions of Section 29(2) of the Act, emphasizing that registration cannot be cancelled with retrospective effect mechanically. The proper officer must exercise discretion based on objective criteria, considering whether the circumstances warrant such cancellation. Merely non-filing of returns does not automatically justify retrospective cancellation.
Furthermore, the Court highlighted the consequences of retrospective cancellation, particularly the denial of input tax credit to the taxpayer’s customers. This aspect must be considered by the proper officer before passing such an order.
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