Lakhdatar Enterprises Vs Principal Commissioner of Department of Trade and Taxes (Delhi High Court)
The Delhi High Court heard a petition filed by the Petitioner challenging a show cause notice (SCN) dated 8th August 2023, which proposed cancellation of the Petitioner’s GST registration. The SCN alleged that the Petitioner had availed Input Tax Credit (ITC) in violation of Section 16 of the Central Goods and Services Tax Act, 2017. The Petitioner had not filed any reply to the SCN, and the case had remained pending for nearly two years.
During proceedings, the Petitioner’s counsel submitted that the GST registration had been valid for eight to nine months, and the turnover during this period was over Rs. 17.5 crore. The Court noted that these details were not disclosed in the petition, indicating non-disclosure of relevant facts. Consequently, the Court directed the Petitioner to file an affidavit within four weeks detailing: the nature of business conducted while the GST registration was valid, total turnover during the registration period, and ITC availed or passed on by the Petitioner. The Court also allowed the Department to update instructions regarding any further proceedings or orders issued after the SCN.
The affidavit required from the Petitioner was not filed. The Respondent’s counsel submitted turnover details for 2022-23 and 2023-24, showing Rs. 6.69 crore and Rs. 9.95 crore respectively, and noted that the Petitioner had made purchases from cancelled dealers. The Court directed the Petitioner to file a reply to the SCN, and instructed the Department to proceed with adjudication in accordance with law. The petition was disposed of on these terms, and all pending applications were also closed.
