Case Law Details
DP Abhushan Vs Commissioner (Delhi High Court)
In the case of DP Abhushan vs Commissioner before the Delhi High Court, the petitioner challenges the dismissal of their appeal seeking restoration of GST registration. The court’s decision revolves around the failure to provide reasons for the cancellation of registration in the Show Cause Notice (SCN).
The petitioner, engaged in the jewelry business, received a Show Cause Notice dated 29.09.2022 for the cancellation of GST registration, citing “Others” as the reason. Subsequently, the order dated 13.10.2022 canceled the registration retrospectively from 28.07.2020, without providing adequate reasons. The petitioner’s appeal against this decision was dismissed on 11.10.2023.
The Delhi High Court scrutinized the orders and found them lacking in clarity and proper reasoning. The court noted that the reasons for cancellation were not mentioned in the SCN, and the subsequent orders failed to provide satisfactory justification for the retrospective cancellation.
The court emphasized that registration cannot be canceled retrospectively without proper justification based on objective criteria. Mere non-filing of returns does not warrant retrospective cancellation, especially if the taxpayer was compliant during the relevant period. Additionally, the court highlighted the adverse consequences for the taxpayer’s customers, who may lose input tax credit, necessitating careful consideration before canceling registration retrospectively.
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