Case Law Details
Gaurav Bansal Vs Commissioner of GST & Anr (Delhi High Court)
Introduction: In a recent case before the Delhi High Court, Gaurav Bansal challenged the retrospective cancellation of his GST registration. The court’s judgment offers insights into the grounds for such cancellations and the proper procedure to be followed. Let’s delve deeper into the details of the case and the court’s decision.
Detailed Analysis: The crux of the matter lies in the retrospective cancellation of Gaurav Bansal’s GST registration, effective from 15th November 2017. The cancellation order, issued in response to a Show Cause Notice dated 8th July 2021, lacked clear reasoning and procedural fairness. Despite Bansal’s filing of GST returns until June 2021, the retrospective cancellation left him without an opportunity to object or present his case effectively.
The court highlighted the flaws in the cancellation process, emphasizing the absence of concrete reasons for retrospective action. While Section 29(2) of the Central Goods and Services Tax Act, 2017, allows for retrospective cancellations, it mandates objective criteria and proper justification. Mere non-filing of returns doesn’t automatically warrant retrospective cancellation, especially when the taxpayer has complied during the period in question.
Furthermore, the court addressed the implications of retrospective cancellation, particularly concerning the denial of input tax credit to the taxpayer’s customers. Such consequences must be considered before deciding on retrospective cancellations, ensuring fairness and adherence to legal principles.
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