Shivi Kansal Vs Union of India (Delhi High Court)
Delhi High Court allowed the petition filed by Shivi Kansal against the retrospective cancellation of the GST registration of his late father’s firm, M/s Kansal Associates, effective July 1, 2017. The firm, a sole proprietorship of Late Mr. Naresh Kansal, had its registration cancelled via an order dated August 9, 2023.
The core issue was the lack of due process following the sole proprietor’s death on April 28, 2021, during the COVID-19 pandemic. The petitioner had informed the authorities via Form GST REG-16 in February 2022 about the proprietor’s demise. However, a Show Cause Notice (SCN) was subsequently issued on July 25, 2022, citing failure to pay collected tax, leading to the cancellation order without any reply or hearing on the merits.
The Court noted that the petitioner learned of the retrospective cancellation only when suppliers complained about their refunds being held up. Recognizing the unfortunate circumstances of the proprietor’s death during the pandemic and the subsequent failure to secure a hearing, the Court held that the petitioner was denied a fair opportunity.
The Delhi High Court set aside the impugned cancellation order and directed the following:
1. The petitioner must be given a fresh opportunity to file a reply to the SCN by October 31, 2025.
