Case Law Details
Swati Gupta Vs Commissioner Of Delhi Goods And Services Tax & Anr (Delhi High Court)
Introduction: In a significant ruling, the Delhi High Court has set aside the retrospective cancellation of GST registration for Swati Gupta, a trader, citing a lack of clarity in the cancellation process. The court modified the cancellation date to align with Gupta’s application date, ensuring fairness and compliance with procedural norms. This decision highlights critical issues regarding the retrospective application of GST cancellations and emphasizes the necessity for clear and transparent administrative actions.
Detailed Analysis: The petitioner, Swati Gupta, was engaged in the business of trading raisins and held a GST registration under the Central Goods and Services Tax Act, 2017. On June 20, 2020, she submitted an application for the cancellation of her GST registration, citing the closure of her business. Despite her compliance with the procedural requirements, the application was rejected on June 25, 2021, without specific reasons, merely stating that the “reply is not satisfactory.”
Subsequently, a Show Cause Notice was issued on June 30, 2021, which ambiguously cited non-filing of returns for a continuous period of six months as the reason for proposed cancellation but lacked specifics regarding the date and time for a hearing. This notice did not inform Gupta that her registration might be canceled retrospectively.
On October 28, 2021, the GST registration was retrospectively canceled effective from July 1, 2017. The order was contradictory, referencing Gupta’s reply dated October 6, 2021, while simultaneously claiming no reply had been submitted. Furthermore, it provided no substantive reason for the retrospective application, creating a significant procedural and legal discrepancy.
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