Case Law Details
Optimum Viking Satcom India Pvt. Ltd. Vs Principal Commissioner & Ors (Delhi High Court)
Introduction: In a significant legal development, the Delhi High Court, in the case of Optimum Viking Satcom India Pvt. Ltd. vs. Principal Commissioner & Ors, addressed the contentious issue of retrospective cancellation of GST registration. The petitioner challenged the order of cancellation dated 06.2022, which retrospectively canceled the GST registration from 01.07.2017. Additionally, the petitioner contested the Show Cause Notice dated 18.11.2021.
Detailed Analysis: The Show Cause Notice, dated 18.11.2021, cited the reason for potential cancellation as the petitioner’s failure to pay collected tax amounts to the Central/State Government within three months. However, crucially, it did not explicitly inform the petitioner about the possibility of retrospective cancellation. The subsequent order, dated 10.06.2022, lacked clarity in justifying the retrospective cancellation, stating only that it was based on the petitioner’s failure to respond to the notice.
The petitioner’s counsel highlighted the petitioner’s shift of office to Noida, Uttar Pradesh, from August 2021 and emphasized the cessation of business activities from the registered office in Delhi after filing returns till 30.11.2021.
The court underscored that Section 29(2) allows the proper officer to cancel GST registration from any retrospective date but should not be a mechanical process. The satisfaction leading to cancellation must be based on objective criteria, and the absence of returns alone should not warrant automatic retrospective cancellation.
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