D J Enterprises Vs Deputy Commissioner of CGST (Delhi High Court)
In the case of D J Enterprises Vs. Deputy Commissioner of CGST, the Delhi High Court ruled on a petition challenging the retrospective cancellation of GST registration. The petitioner’s registration had been revoked on 26 July 2022, and after applying for revocation, the registration was restored on 26 December 2023. However, on the same day, a new show cause notice was issued by the authorities, threatening cancellation of the registration again. The petitioner was given only a day to respond, a time frame deemed unreasonable by the Court. Furthermore, the order of cancellation dated 08 January 2024 cited retrospective cancellation from 19 December 2018, without providing adequate reasoning or an opportunity for the petitioner to contest the decision.
The Court highlighted procedural flaws in the cancellation process, emphasizing the importance of due opportunity for the affected party to respond. It pointed out that the notice failed to specify the retrospective nature of the cancellation, which is a critical aspect under the Central Goods and Services Tax (CGST) Act. The Court referred to previous cases, establishing that retrospective cancellation must be justified with clear reasoning and should not be applied mechanically. In this case, the Court found that the retrospective cancellation order was arbitrary and lacked sufficient explanation for its application. Consequently, the High Court quashed the order and directed the authorities to restore the GST registration, providing relief to the petitioner.
