Case Law Details
Shobha Rani Vs Commissioner of Delhi Goods And Services Tax & Anr. (Delhi High Court)
In the case of Shobha Rani Vs Commissioner of Delhi Goods and Services Tax & Anr., the Delhi High Court addressed the validity of a retrospective Goods and Services Tax (GST) registration cancellation. The petitioner challenged an order dated June 22, 2021, which canceled their GST registration (GSTIN: 07AJJPR3972L1ZI) retroactively from October 26, 2017.
The order under scrutiny lacked specific reasoning for the cancellation, referencing only a Show Cause Notice (SCN) dated February 8, 2021. This notice informed the petitioner about the proposed cancellation due to non-filing of returns over six months but did not propose the retrospective effect of the cancellation nor provide a clear date for personal hearing.
The petitioner argued that they were not given a fair opportunity to contest the retrospective aspect of the cancellation. They claimed that the SCN did not specify a hearing date, making the cancellation unjust. The court concurred, noting that the failure to provide a personal hearing on the retrospective effect of the cancellation violated principles of natural justice.
The petitioner expressed no objection to the cancellation itself but contested the retrospective nature of the order. The respondent’s counsel suggested that the Proper Officer, under Section 29(2) of the Central Goods and Services Tax Act, 2017, should decide the retrospective cancellation issue after a proper hearing.
The Delhi High Court set aside the impugned order and remanded the matter to the Proper Officer for reconsideration. The petitioner was given two weeks to respond to the SCN, after which the Proper Officer must review the case afresh, ensuring the petitioner has an opportunity to be heard.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition impugning an order dated 22.06.2021 (hereafter the impugned order) whereby the petitioner’s Goods and Services Tax Registration – Goods and Service Tax Identification Number (GSTIN) 07AJJPR3972L1ZI – was cancelled with retrospective effect from 26.10.2017.
2. The impugned order does not indicate any reason for cancelling the petitioner’s GST registration except referring to the Show Cause Notice dated 08.02.2021 (hereafter the impugned SCN).
3. The petitioner was issued the impugned SCN and called upon the petitioner to show case as to why its GST registration be not cancelled on the failure to file the returns for continuous period of six months. The petitioner was called upon to file the reply to the impugned SCN within the period of seven working days. The petitioner was also put to notice that if the petitioner did not appear for personal hearing on the appointed date and time, the case would be decided ex parte. Additionally, the petitioner’s GST registration was suspended from the date of the impugned SCN – 08.02.2021.
4. It is material to note that the impugned SCN did not propose cancellation of the petitioner’s GST registration with retrospective effect. Although, the petitioner was put to notice that in case the petitioner failed to appear for personal hearing at the appointed date and time, the case would be decided ex parte. However, no date or time for personal hearing was mentioned in the impugned SCN.
5. In view of the above, we find merit in the contention of the petitioner that the petitioner’s GST registration could not have been cancelled without affording the petitioner an opportunity of personal hearing to address the aspect of cancellation of GST registration with retrospective effect.
6. Mr. Mahana, learned counsel appearing on behalf of the petitioner, states on instructions, that the petitioner has no objection if the petitioner’s registration remains cancelled, and the present petition be confined to the question of cancellation with the retrospective effect. He submits that there is no plausible reason to cancel the petitioner’s registration to cover the period during which the returns were duly filed by the petitioner.
7. The learned counsel for the respondent states that it would not be apposite for this Court to decide the question of retrospective cancellation as the Proper Officer is duly empowered under Section 29(2) of the Central Goods and Services Tax Act, 2017 to cancel the registration with such date as he considers fit. He submits that the matter may remanded to the Proper Officer to consider this aspect of cancellation of GST registration of the petitioner after hearing the petitioner.
8. In the peculiar facts of this case including the delay on the part of the petitioner to approach this Court, the submission made by the learned counsel for the respondent commends to this Court.
9. In view of the above, the impugned order is set aside and the matter is remanded to the Proper Officer for consideration afresh. The petitioner may file its reply to the impugned SCN within the period of two weeks from date. The Proper Officer will consider the reply of the petitioner and take an informed decision after affording an opportunity of being heard to the petitioner.
10. The petition stands disposed of in the aforesaid terms. Pending application also stands disposed of.
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