Akash Garments India Pvt Ltd Vs Union of India & Anr (Delhi High Court)
Delhi High Court held that cancellation of GST registration with retrospective effect merely because the taxpayer has not filed returns for some period not justified. Court directed to cancel registration from date of issuance of SCN.
Facts- The petitioner is essentially aggrieved by the order cancelling its Goods and Services Tax registration with retrospective effect from 02 July 2017. The allegation which formed the basis for that notice was a purported failure on the part of the petitioner to furnish returns as required under Section 39 of the Act. The respondents had alleged that the petitioner had failed to furnish returns for a continuous period of six months.
Conclusion- In the case of Delhi Polymers vs Commissioner, Trade and Taxes & Anr. it is held that in terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect it can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer’s registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
