Case Law Details
Sagar Enterprises Vs Principal Commissioner of Goods And Service Tax West Delhi (Delhi High Court)
Introduction: In a recent development, the Delhi High Court has addressed the issue of retrospective cancellation of GST registration in the case of Sagar Enterprises Vs Principal Commissioner of Goods And Service Tax, West Delhi. The court’s decision to grant the petitioner one week to file a reply to the show cause notice sheds light on procedural fairness in such matters.
Detailed Analysis: The petitioner challenged the order dated 16.01.2024, which cancelled their GST registration with effect from 15.07.2022. The primary contention raised was regarding the lack of sufficient time provided to respond to the show cause notice issued on 21.12.2023. The notice, issued less than 24 hours before the scheduled hearing, did not mention the name of the issuing authority or the place of appearance.
The court observed that the petitioner was denied a fair opportunity to represent their case. Furthermore, the order of cancellation lacked adequate reasoning and justification for the retrospective action taken.
Referring to Section 29(2) of the Central Goods and Services Tax Act, 2017, the court emphasized that registration cannot be cancelled retrospectively without objective criteria and proper justification. The consequences of such cancellation, including the denial of input tax credit to customers, must be considered before taking such action.
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