Raghav Arora L/H of Sh. Gopal Kishan Arora Vs GST Officer (Delhi High Court)
This article analyzes the recent Delhi High Court judgment in the case of Raghav Arora vs GST Officer (W.P.(C) No. 1272/2024), which sheds light on the crucial legal aspects surrounding the cancellation of Goods and Services Tax (GST) registration with retrospective effect.
Background:
The case involved M/s Hari Gopal Steel, a company registered under the GST Act, 2017. The firm’s proprietor, Sh. Gopal Kishan Arora, passed away in March 2021. His legal heir, Raghav Arora, challenged the GST officer’s order dated November 24, 2020, which retrospectively cancelled the company’s registration effective July 1, 2017.
Key Issues and Arguments:
The petitioner, Raghav Arora, contested the retrospective cancellation on several grounds:
- Delay in Order: The appeal against the cancellation order was dismissed solely due to limitation issues, ignoring the petitioner’s arguments.
- Lack of Proper Notice: The show-cause notice issued in August 2019 did not mention the possibility of retrospective cancellation.
- Unjustified Retrospection: The cancellation order lacked justification, as the firm reportedly filed GST returns and made payments before November 2018.
- Business Discontinuation: The petitioner clarified that the business ceased operations upon Sh. Gopal Kishan Arora’s demise and expressed no intention of continuing it.
Court’s Observations and Judgment:
The Delhi High Court acknowledged the limitations highlighted by the petitioner regarding the dismissed appeal and the lack of proper notice in the show-cause notice. The court emphasized that the power to cancel GST registration retrospectively, as per Section 29(2) of the Act, should not be exercised mechanically but based on objective criteria and with due consideration of the consequences.
Here are the key takeaways from the court’s judgment:
