Alaknanda Steel Vs Commissioner of Delhi Goods And Services Tax And Anr (Delhi High Court)
The case Alaknanda Steel Vs Commissioner of Delhi Goods and Services Tax and Anr was heard by the Delhi High Court concerning the rejection of Alaknanda Steel’s GST registration cancellation request. The petitioner challenged the order dated 09.06.2023, which not only rejected the cancellation application but also issued a show cause notice (SCN) for alleged violations of Section 16 of the GST Act. Subsequently, on 30.06.2023, the GST registration was canceled retrospectively from 01.07.2017, which the petitioner contested. The petitioner argued that the GST registration should be canceled from the date of application, as their business was discontinued.
The court noted procedural irregularities in the issuance of the SCN. The SCN lacked specific allegations and failed to provide a date and time for a personal hearing, thereby violating the principles of natural justice. Additionally, the court observed that while the SCN proposed cancellation, it did not suggest the cancellation should have retrospective effect. Thus, the petitioner had no opportunity to contest the retrospective cancellation, making the cancellation order flawed.
In its judgment, the court concluded that although the petitioner did not object to the GST registration cancellation, the retrospective effect was unjustified. The court ruled that the cancellation would be valid only prospectively, from the date of the SCN (09.06.2023), and not from 01.07.2017 as ordered by the GST authorities. The court further clarified that the authorities could initiate new proceedings in compliance with the law if there were valid grounds for retrospective cancellation.
