Case Law Details
Samayshristi Enterprises Vs Superintendent (Delhi High Court)
Introduction: The recent judgment by the Delhi High Court in the case of Samayshristi Enterprises vs. Superintendent addresses the treatment of GST registration cancellation. The court overturned the rejection of the petitioner’s application for cancellation, emphasizing the need for proper justification in such decisions.
Detailed Analysis: The petitioner, engaged in trading ferrous waste and stainless steel, applied for the cancellation of their GST registration due to financial constraints. Despite submitting responses to queries raised by the authorities, their application was rejected on the grounds of non-attendance at a personal hearing and failure to provide necessary details.
However, the High Court found the rejection order lacking in substantial reasoning and details, rendering it unsustainable. Consequently, the court set aside the rejection order and directed the cancellation of GST registration from the date of the petitioner’s application, i.e., 21.11.2023. The petitioner was instructed to comply with the statutory requirements under Section 29 of the Central Goods and Services Tax Act, 2017.
The judgment clarified that the authorities could still pursue recovery proceedings for any outstanding taxes, penalties, or interests owed by the petitioner.
Conclusion: The Delhi High Court’s decision provides clarity on the treatment of GST registration cancellation applications. It underscores the importance of providing adequate reasoning and details in rejection orders, ensuring procedural fairness. Businesses facing similar situations can now seek cancellation of GST registration with confidence, knowing that the courts prioritize procedural integrity and fairness in such matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Petitioner impugns order dated 03.01.2024 whereby the application seeking cancellation of GST registration of the Petitioner has been rejected.
2. Vide impugned order dated 03.01.2024, petitioner’s application seeking cancellation of GST registration was rejected for the following reason:-
“The taxpayer neither attended personal hearing on stipulated date and time nor submitted requisite reply against the query raised. Accordingly, request for cancellation of GST registration is rejected under the provision laid down in Section 29 of CGST Act, 2017.”
3. Petitioner was engaged in business of trading of ferrous waste, scrap as well as stainless steel and possessed GST registration.
4. Learned counsel for petitioner submitted that due to financial stringency to continue business, the petitioner had closed down all business activities and was no longer interest in continuing the business. Petitioner filed an application for cancellation of GST registration w.e.f. 21.11.2023.
5. Pursuant to the application, show cause notice dated 22.11.2023 was issued by the respondents seeking additional information/clarification/documents for cancellation of registration stating “ Basic Details – Others (Please specify) – Please provide/ upload address for future correspondence other than mentioned in Principal place of Business. 2 Cancellation Details – Others (Please specify) – Please provide reconciliation of GSTR-1 and GSTR-3B along with GSTR 2A Vs. GSTR-3B.”
6. As per petitioner, he submitted a response to the queries raised by the Respondent in compliance to the aforesaid notice.
7. Thereafter, impugned order dated 03.01.2024 rejected the application for cancellation of GST registration. The said order merely states “The taxpayer neither attended personal hearing on stipulated date and time nor submitted requisite reply against the query raised. Accordingly, request for cancellation of GST registration is rejected under the provision laid down in Section 29 of CGST Act, 2017.”
8. In our view, order dated 03.01.2024 does not qualify as an order rejecting the application seeking cancellation of GST registration as the same is bereft of any details or reasons and accordingly the same cannot be sustained.
9. In view of the above the order dated 03.01.2024 is set aside. The application of the Petitioner seeking cancellation is allowed. The GST registration of the Petitioner shall now be treated as cancelled with effect from 21.11.2023 i.e., the date when the petitioner applied for cancellation of GST registration. Petitioner shall comply with the requirements of Section 29 of the Central Goods and Services Tax Act, 2017 and furnish the requisite details.
10. It is clarified that Respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due in respect of the subject firm in accordance with law.
11. Petition is accordingly disposed of in the above terms.
12. Order dasti under the signatures of the Court Master.
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