Case Law Details
Sun N Sand Exim India Pvt Ltd Vs Superintendent Division Karol Bagh Range (Delhi High Court)
The case of Sun N Sand Exim India Pvt Ltd Vs Superintendent Division Karol Bagh Range, heard in the Delhi High Court, revolves around the retrospective cancellation of GST registration. The petitioner contested the cancellation, citing procedural flaws and lack of opportunity to object to the retrospective action.
The petitioner challenged the order dated 14.02.2023, which retrospectively canceled their GST registration from 02.07.2017. The cancellation was based on a show cause notice issued on 26.08.2022, alleging the non-existence of the firm. However, the court noted that neither the notice nor the order provided adequate details to justify the retrospective cancellation. The petitioner contended that they had regularly filed returns and had communicated the closure of their Delhi branch. Additionally, they had shifted their business to Bahadurgarh in May 2019, further supporting their argument against retrospective cancellation.
The court emphasized that the lack of specific details in the show cause notice deprived the petitioner of the opportunity to object to the retrospective cancellation. It highlighted that cancellation with retrospective effect should not be mechanical but based on objective criteria. The court also noted the potential consequences of retrospective cancellation on the taxpayer’s customers, emphasizing the need for careful consideration before such action is taken.
The impugned order failed to qualify as a proper cancellation order, as it lacked clarity and coherence. While both parties desired cancellation, the court modified the order to reflect cancellation from the date of the show cause notice, providing relief to the petitioner. However, the respondents were not precluded from taking lawful steps for recovery, including retrospective cancellation, if necessary.
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