High Court Rules Non-Filing of Return Alone Insufficient for Abrupt GST Registration Cancellation

• Notice Issued:

- A notice has been issued, and the counsel for the respondents has acknowledged it.

• Petitioner's Grievance:

- The petitioner challenges an order dated 29-1-2021, canceling its GST registration retroactively from 1-7-2017.

• Background of Petitioner's Claims:

- The petitioner registered under the CGST Act with GSTIN 07AAECB8385L1Z4 from 1-7-2017.

- The business faced difficulties in 2019, prompting the petitioner to surrender its GST registration on 28-11-2019 after settling all GST dues and filing returns up to that point.

• Rejection and Subsequent Actions:

- Respondent no. 2 issued a notice on 15-6-2020 seeking more information about the cancellation application.

- The petitioner did not respond, leading to rejection of the cancellation on 8-7-2020.

- The petitioner reapplied on 8-7-2020, claiming a notice issued on 16-9-2020 exceeded the stipulated period.

- The second cancellation attempt was rejected on 5-11-2020.

• Show Cause Notice (SCN) and Suspension:

- A Show Cause Notice (SCN) dated 13-1-2021 proposed cancellation due to the petitioner's non-filing of returns for six consecutive months.

- The petitioner's GST registration was suspended from 13-1-2021.

• Impugned Order:

- The impugned order, dated 29-1-2021, canceled the petitioner's GST registration retrospectively from 1-7-2017.

• Lack of Specifics in SCN and Impugned Order:

- The SCN did not specify the date for a personal hearing or propose retrospective cancellation.

- The impugned order provided no reasons for the retrospective cancellation, merely stating no response was received to the SCN.

• Court Decision:

- The court finds the retrospective cancellation unjustified and notes the petitioner ceased business in 2019, applying for cancellation from 28-11-2019.

- The grounds for retrospective cancellation from 1-7-2017 are deemed insufficient.

• Court Directive:

- The court directs that the cancellation of the petitioner's GST registration should take effect from 28-11-2019, not 1-7-2017.

• Future Actions:

- The court clarifies that this directive does not prevent respondents from taking lawful steps under the CGST Act or other relevant statutes. Balajee Plastomers (P.) Ltd Vs. Commissioner of Delhi GST