Bansal Exim Vs Commissioner of DGST (Delhi High Court)
In Bansal Exim Vs Commissioner of DGST, the Delhi High Court addressed the cancellation of Bansal Exim’s GST registration, which was retrospectively revoked due to the non-filing of returns for over six months. The petitioner, registered under the Central Goods and Services Tax (CGST) and Delhi Goods and Services Tax (DGST) Acts, did not respond to the show cause notice (SCN) issued on 13.01.2023, which led to the cancellation of the GST registration effective from 01.07.2017. The petitioner’s appeal to revoke the cancellation was rejected because it was filed beyond the allowable period of three months. Bansal Exim argued that the failure to file returns was due to illness and expressed readiness to file the pending returns.
The court found that the SCN did not propose a retrospective cancellation of GST registration, and the petitioner was not given an opportunity to contest this severe action, violating principles of natural justice. Additionally, the cancellation order lacked sufficient reasoning to justify the retrospective effect. Citing precedents, including the Suguna Cutpiece Center and Rakesh Enterprises cases, the court emphasized the need to provide taxpayers an opportunity to remedy the cause of cancellation, as it affects their fundamental right to operate a business. The court ordered the restoration of Bansal Exim’s GST registration for 30 days, allowing them to file returns. The concerned officer was given the discretion to take further action if necessary, following due process.
