Case Law Details
VAB Apparel LLP Vs Commissioner, Delhi GST And Ors (Delhi High Court)
Introduction: VAB Apparel LLP recently faced a legal challenge against the cancellation of its GST registration by the Commissioner, Delhi GST, and others. The petitioner contested an order dated 23.05.2022, arguing that the cancellation, effective from 05.03.2018, lacked proper grounds as per the Show Cause Notice (SCN) issued on 19.05.2022.
Detailed Analysis: The heart of the matter lies in the lack of substance in the SCN. The reasons cited for cancellation, involving fraud, wilful misstatement, or suppression of facts, were vague. Despite being granted seven working days to respond, the petitioner’s GST registration was canceled just four days after the SCN was issued. The impugned order pointed to an improper response, absence of documentary evidence, and no appearance for a personal hearing as the basis for cancellation.
However, a critical examination reveals the absence of specific details about the alleged fraud or misstatement. The order, dated 23.05.2022, failed to specify any material particulars regarding the charges against the petitioner. Furthermore, the retrospective cancellation to 05.03.2018, the date of initial registration, lacked a justified explanation.
The respondents later provided a cryptic reason for cancellation, claiming the party was non-functioning, and both buyers and suppliers were suspicious. Notably, the petitioner’s closed shop was cited as a ground for cancellation. The court, however, emphasized that the mere closure of the shop, without additional evidence, does not justify the cancellation of the GST registration.
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