Kamal Kindra Vs Commissioner of State Tax (Delhi High Court)
SCN not tenable for non-filing of returns subsequent to date of cancellation of provisional registration: Delhi High Court
Summary: The Delhi High Court, in the case of Kamal Kindra v. Commissioner of State Tax, ruled that a show cause notice (SCN) for non-filing of returns is not valid if it is issued after a provisional GST registration has already been cancelled. The petitioner, Kamal Kindra, a sole proprietor, had closed his business in April 2019 and applied for GST registration cancellation in May 2019. While his provisional registration was cancelled in June 2020, a subsequent SCN was issued in July 2021 for not filing returns for the six-month period preceding the notice. The court noted that because the provisional registration was already cancelled, the petitioner was not obligated to file returns, making the SCN and the subsequent order to cancel the registration retrospectively from July 1, 2017, untenable.The court’s decision reinforces the principle that retrospective cancellation of GST registration must be reasonable and aligned with the actual date the business ceased operations. The court set aside the cancellation order from August 2021 and directed that the petitioner’s GST registration be considered cancelled from May 8, 2019, the date he had originally applied for it. This judgment highlights the importance of procedural fairness and the need for tax authorities to avoid mechanically applying retrospective cancellation orders without considering the facts of the case. It also aligns with similar rulings by other high courts, such as the Gujarat High Court, which have cautioned against such practices.
