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Case Law Details

Case Name : Shri Ganesh Enterprises Vs Principal Commissioner of Goods And Services Tax (Delhi High Court)
Appeal Number : W.P.(C) 2574/2024
Date of Judgement/Order : 21/02/2024
Related Assessment Year :

Shri Ganesh Enterprises Vs Principal Commissioner of Goods And Services Tax (Delhi High Court)

Introduction: The case of Shri Ganesh Enterprises vs. Principal Commissioner of Goods and Services Tax presents a pivotal decision by the Delhi High Court regarding the retrospective cancellation of GST registration. The High Court’s judgment has far-reaching implications for businesses facing similar issues with their GST registrations.

Detailed Analysis: The crux of the matter lies in the procedural irregularities observed by the High Court. The petitioner, Shri Ganesh Enterprises, had initially applied for the cancellation of its GST registration. However, the subsequent rejection of this application and the issuance of a show cause notice (SCN) lacked essential details, including the name or designation of the officer and the place where the petitioner was required to appear.

This lack of specificity in the show cause notice raised questions of procedural fairness and compliance with legal requirements. Furthermore, the petitioner’s submission of a sum of Rs. 7,50,107/- in acknowledgment of discrepancies in their return demonstrated a proactive approach to rectifying issues.

The High Court’s decision to set aside the order rejecting the petitioner’s application for cancellation of registration is significant. By retroactively canceling the GST registration from the date of the initial application, the Court ensures fairness and adherence to statutory provisions. However, the Court also mandates compliance with Section 29 of the Central Goods and Services Tax Act, 2017, requiring the petitioner to furnish all necessary details as per legal requirements.

Conclusion: In conclusion, the Delhi High Court’s ruling in the case of Shri Ganesh Enterprises vs. Principal Commissioner of Goods and Services Tax underscores the importance of procedural regularity and adherence to legal requirements in matters concerning GST registration. The decision serves as a reminder to authorities to ensure clarity and specificity in show cause notices, thereby upholding the principles of natural justice. Moving forward, businesses must remain vigilant regarding procedural compliance to avoid similar challenges with their GST registrations.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Petitioner impugns show cause notice dated 10.11.2023 whereby the GST registration of the petitioner was suspended with effect from 10.11.2023.

2. Vide show cause notice dated 10.11.2023, petitioner was called upon to show cause as to why the registration be not cancelled for the following reasons:-

“Section 29(2)(e)-registration obtained by means of fraud, willful misstatement or suppression of facts”

3. Petitioner was running his business and possessed GST registration.

4. Petitioner had submitted an application seeking cancellation of GST registration on 23.02.2023. Pursuant to the said application for cancellation. Petitioner was a issued show cause notice dated 27.02.2023 inter-alia seeking information of inputs held in stock or inputs contained in semi-finished or finished goods held in stock.

5. Vide order dated 10.11.2023, the application for cancellation of registration was rejected. Said order records that “Neither the tax payer nor any authorised person on behalf of the tax payer appeared for personal Hearing. You have not replied to the notice issued by this office within the time specified therein. Therefore, your application for cancellation of registration is hereby rejected in accordance with the provisions of the Act. Therefore, you application is rejected in accordance with the provisions of the Act.”

6. Thereafter a show cause notice dated 10.11.2023 was issued to the petitioner after a gap of 9 months seeking to cancel its registration. Said notification was issued on the ground that “Section 29(2)(e)-registration obtained by means of fraud, willful misstatement or suppression of facts”. The show cause notice required the petitioner to appear before the undersigned i.e. authority issuing the notice. Notice did not give the name or designation the officer or place where the petitioner has to appear.

7. Thereafter, vide show cause notice dated 10.11.2023, the registration of the petitioner was suspended w.e.f. 10.11.2023.

8. Learned counsel for the petitioner submitted that petitioner has shut all business activities. As per the petitioner he on his own found discrepancy in his return and accordingly deposited a sum of Rs. 7, 50,107/-.

9. In view of above facts and circumstances, the order dated 10.11.2023 rejecting application of the petitioner seeking cancellation of its registration is set aside. The GST registration is cancelled with effect from 23.02.2023 i.e. the date when the petitioner first applied for cancellation of its registration. Petitioner shall, however, comply with Section 29 of the Central Goods and Services Tax Act, 2017 and furnish all the details as required by the said provisions.

10. It is clarified that respondents are at liberty to take further action in accordance with law and are not precluded from taking any steps for recovery of any tax, penalty or interest that may be due from the petitioner.

11. The petition is accordingly disposed of in the above terms.

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