Case Law Details
Manish Anand Vs AVATO Ward-45 State Goods And Services Tax & Ors. (Delhi High Court)
Introduction: The case of Manish Anand Vs AVATO Ward-45 State Goods And Services Tax & Ors. before the Delhi High Court pertained to the retrospective cancellation of GST registration due to the failure to furnish returns for a continuous period of six months. The High Court’s modification of the order has significant implications for taxpayers and tax authorities alike.
Detailed Analysis: The petitioner, Manish Anand, challenged the retrospective cancellation of his GST registration, which was effective from 01.07.2017, through an order dated 15.12.2022. The cancellation was based on a show-cause notice issued on 02.12.2021, citing the failure to furnish returns for a continuous period of six months. However, both the show-cause notice and the subsequent order lacked substantive reasons for the retrospective cancellation.
The Delhi High Court observed that the cancellation of GST registration with retrospective effect cannot be mechanical and must be based on objective criteria. Mere non-filing of returns does not warrant retrospective cancellation covering periods of compliance. Additionally, the court highlighted that retrospective cancellation affects the input tax credit availed by the taxpayer’s customers, warranting careful consideration.
Considering the petitioner’s lack of interest in continuing business activities and the absence of valid reasons for retrospective cancellation, the High Court modified the order. The registration was treated as cancelled from the date of the show-cause notice issuance, i.e., 02.12.2021. The petitioner was directed to comply with Section 29 of the Central Goods and Services Tax Act, 2017.
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