Case Law Details
Delhi Metal Company Vs Pr Commissioner of Goods And Service Tax (Delhi High Court)
The Delhi Metal Company vs Pr Commissioner of Goods and Service Tax case involves a crucial matter of GST registration cancellation. The petitioner, engaged in trading aluminum and copper, sought cancellation due to business closure. However, technical glitches and an ongoing investigation added complexities to the process.
Detailed Analysis:
1. Application for Early Hearing: The petitioner filed an application for early hearing, which was contested by the respondent. Despite discrepancies in the application, the court allowed the prayer, emphasizing it doesn’t imply acceptance of the stated averments.
2. GST Registration Cancellation Process: The petitioner applied for GST registration cancellation on 12.04.2023, citing business closure. The respondent, however, raised queries and rejected the request on 02.06.2023. The petitioner reapplied on 02.06.2023, facing similar queries on 08.06.2023.
3. Ongoing Investigation: The respondent, citing an ongoing investigation into suspicious activities, delayed processing the cancellation. The court raised questions about compelling a closed business to maintain GST registration. The case was listed for further hearing on 11.2023.
4. Resolution of Technical Glitch: Following the court’s order, steps were initiated for cancellation, but a technical glitch occurred. The petitioner, committing to joining the investigation, led to a resolution. The court directed the respondent to proceed with cancellation, clarifying room for statutory actions if needed.
Conclusion: The Delhi High Court’s intervention resolved the technical glitch in the cancellation of the petitioner’s GST registration. The order ensures compliance with the application and clarifies the authority’s ability to take further steps if statutory violations are identified. The case highlights the intersection of legal proceedings, technical challenges, and ongoing investigations in GST matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present application, seeking early hearing of the above captioned petition.
2. Ramachandran, learned counsel appearing for the respondent, submits that the averments made in the application are not entirely accurate. Nonetheless, he has no objection if the prayer for early hearing of the above captioned application is allowed.
3. In view of the above, the application is allowed, while recording that nothing stated in the order should be construed as accepting the averments made in the application.
4. The next date of hearing, fixed for 01.2024, stands cancelled.
W.P.(C)14824/2023
5. The petitioner has filed the present petition, inter alia, praying that the respondents be directed to allow the petitioner’s application for cancellation of its Goods and Service Tax (‘GST’) registration.
6. The petitioner had secured its registration with the GST authorities and was assigned the GSTIN 07AATFD4831H1Z7. The petitioner claims that it was carrying on the business of trading in aluminium and copper On 12.04.2023, the petitioner applied for the cancellation of its GST registration, as it had closed down its business, with effect from 12.04.2023.
7. On 05.2023, the respondent raised a query, seeking additional information/clarification, in respect of the petitioner’s request for cancellation of its GST registration. Thereafter, by an order dated 02.06.2023, the respondent rejected the petitioner’s request for cancellation of its GST registration.
8. In view of the above, the petitioner once again applied for cancellation of its GST registration on 02.06.2023. The same pattern was repeated and the respondent, once again, on 08.06.2023, raised queries as were raised in its communication dated 10.05.2023.
9. The petitioner has claimed that its constituent partners appeared before the office of the concerned GST Commissionerate on 27.07.2023 and 01.08.2023, in respect of the ongoing investigation.
10. The short controversy, in the present petition, is regarding the petitioner’s right for cancellation of its GST registration. This petition was listed on 11.2023 and notice was issued. On 17.11.2023, this Court passed the following order:
“1. The petitioner has filed the present petition praying that directions be issued to the respondent to allow its application for cancellation of its GST registration. It is the petitioner’s case that it had closed down its business and applied for cancellation of its GST registration on 12.04.2023. Notwithstanding the same, the petitioner’s GST registration has not been cancelled.
2. Mr. R. Ramachandran, learned counsel appearing for the respondent submits that currently an investigation is being conducted against the petitioner on account of various suspicious activities and therefore, the petitioner’s application has not been processed.
3. On a pointed query, as to under which provision of law, can the respondent compel a taxpayer to maintain its GST registration after the taxpayer has closed down its business and seeks cancellation of its GST registration, Ramachandran seeks time to respond to the same.
4. At his request, list on 11.2023.”
11. Pursuant to the aforesaid order, Ramachandran states that effective steps have been initiated for cancellation of the petitioner’s GST registration, the same should have been cancelled today but there was a technical glitch which has been resolved.
12. He also states that the petitioners have not joined the investigation and ought to be directed to do so, as committed by them in their application for seeking early hearing of the above captioned petition.
13. The learned counsel appearing for the petitioner states that the petitioner would join the investigation immediately.
14. In view of the above, we consider it apposite to dispose of the writ petition by directing that the respondent shall take steps for cancellation of the petitioner’s GST registration in terms of its application.
15. It is also clarified that the respondents are not precluded from taking any other steps, if there is any statutory violation on the part of the petitioner.
16. Dasti.
