Case Law Details
Hari Om Metals Vs Commissioner of Central Goods And Services Tax And Anr (Delhi High Court)
Introduction: The recent case of Hari Om Metals Vs Commissioner of Central Goods And Services Tax And Anr before the Delhi High Court sheds light on the cancellation of GST registration. The petitioner challenges the retrospective cancellation order, emphasizing the importance of objective criteria in such decisions.
Detailed Analysis: The petitioner contests the show cause notice and order dated 16.01.2023, arguing that a previous notice on similar grounds had been dropped after a personal hearing. The dispute between partners led the petitioner to discontinue the business, prompting the request for GST registration cancellation.
The Delhi High Court observes a lack of reasoning in the impugned order and highlights Section 29(2) of the Central Goods and Services Tax Act, 2017. The court emphasizes that proper officers can cancel registration retrospectively only if objective criteria justify such action. Subjective satisfaction is insufficient, and cancellations should not cover periods of compliance without cogent reasons.
The court notes the potential consequences of retrospective cancellations, affecting input tax credit for customers. While not delving into this aspect, the court underscores the need for proper consideration by the proper officer.
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