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2024 (2) TMI 478 - DELHI HIGH COURTCancellation of registration of the firm with retrospective effect - Returns 3 B not filed - GTO more than 5 crore - 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 mechanically. 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. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer’s registration with retrospective effect is that the taxpayer’s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent’s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. There is nothing on record to show that the deceased was not making the requisite compliances under the Act. As such the retrospective cancellation is not warranted. In view of the fact that petitioner does not seek to continue the registration, the impugned order dated 30.12.2021 is modified to the limited extent that registration shall now be treated as cancelled with effect from 13.04.2021 i.e., date of demise of late Mr. Rajendra Kumar Bothra. The Petitioners i.e., legal heir of the deceased proprietor shall file the requisite returns of any transactions of the business done and shall also place the details of stock left at the time of his death. Petition disposed off.
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