Salwa Foods Proprietorship Mr. Amaan Sheikh Vs Commissioner of Central Goods and Services Tax (Delhi High Court)
Delhi High Court, in Salwa Foods vs. Commissioner of Central Goods and Services Tax, addressed the petitioner’s challenge against the cancellation of its GST registration with retrospective effect from December 28, 2018. The writ petition was filed belatedly, but the Court acknowledged that the Central Goods & Services Tax Act, 2017 (CGST Act) does not bar a taxpayer from applying for a fresh registration even if a prior registration was canceled.
The Court referred to a Circular issued by the Central Board of Indirect Taxes and Customs (CBIC) on March 28, 2019, which outlines the process for re-registration. The Circular directs tax authorities to carefully evaluate applications for fresh registration, particularly when an applicant’s previous registration was canceled. It also provides that failure to apply for revocation of cancellation may be considered a deficiency under Rule 9(2) of the CGST Rules, potentially leading to rejection of the new registration application.
Furthermore, tax officers are required to compare details from earlier registrations with new applications, verifying past compliance issues. If a previous cancellation was due to violations under Section 29(2)(b) and (c) of the CGST Act, and those violations persist, fresh registration may be denied. The Court noted that applicants must provide satisfactory justification for a new registration, or risk rejection under Rule 9(4) of the CGST Rules.
