Friends Media Add Company Vs Principal Commissioner of Goods And Service Tax West Delhi (Delhi High Court)
Introduction: In a recent case, Friends Media Add challenged the retrospective cancellation of its GST registration by the Principal Commissioner of Goods and Service Tax, West Delhi. The Delhi High Court examined the legality of the cancellation and provided a significant ruling regarding the retrospective nature of such actions.
Background:
Friends Media Add Company (petitioner) challenged the cancellation of its GST registration by the Principal Commissioner of Goods and Service Tax (respondent). The order, dated December 12, 2023, cancelled the registration retrospectively, effective from May 30, 2022.
Grounds for Cancellation:
The respondent issued a show-cause notice alleging the petitioner violated the GST Act by:
- Issuing invoices or bills without providing goods or services.
- Leading to wrongful claiming or utilization of input tax credit (ITC) or tax refund.
However, the notice lacked specifics:
- No details about the alleged invoice irregularities were provided.
- The quantum of wrongful ITC availed or refund claimed remained unclear.
Petitioner’s Arguments:
The petitioner argued that:
- The show-cause notice and cancellation order lacked specific details and reasoning, violating their right to fair hearing.
- The retrospective cancellation was unjustified without objective criteria.
- They deposited the disputed ITC amount and interest, intending to cease operations.
- Cancellation should only apply from the notice date, not retroactively.
Respondent’s Arguments:
The respondent claimed:
