Case Law Details
Koxan India Vs Asstt. Commissioner of GST & Anr. (Delhi High Court)
Introduction: In a significant ruling, the Delhi High Court addressed the contentious issue of retrospective cancellation of Goods and Services Tax (GST) registration in the case of Koxan India Vs Asstt. Commissioner of GST & Anr. The court’s decision sheds light on the legal requirements for cancelling a GST registration and the implications of doing so retrospectively. This article examines the court’s judgment and its impact on taxpayers and the administration of GST law.
Detailed Analysis: The petitioner, Koxan India, challenged the order dated 24.03.2021, which cancelled its GST registration retrospectively from 01.07.2017, and a Show Cause Notice dated 17.02.2021. The notice was issued on the grounds of non-filing of GST returns for a continuous period of six months. The petitioner contended that they had filed returns up to 30.09.2020 and intended to cease business operations, seeking to cancel their GST registration accordingly.
The court scrutinized the cancellation order and the show cause notice, highlighting the absence of justification for the retrospective effect of cancellation and the lack of opportunity for the petitioner to object to such a decision. The judgment emphasized that GST registration can only be cancelled retrospectively based on objective criteria and not merely due to non-filing of returns for a certain period.
Furthermore, the court noted the potential consequences of retrospective cancellation on the taxpayer’s customers, particularly regarding the denial of input tax credit for supplies made during the period in question. This aspect underscores the need for careful consideration by the proper officer before deciding on retrospective cancellation.
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