9911796707
TMI Blog2024 (10) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... the present petition." 2. The petitioner is stated to have obtained its Goods and Services Tax [GST] registration on 02 April 2024 and to have sought cancellation of the same on 06 August 2024 as a result of the closure of its business. 3. The respondent, however, has rejected the application on 20 August 2024 in the following terms:- "Order of Rejection of Application for Cancellation This has reference to your reply filed vide ARN AA070824011614E dated 06/08/2024. The reply has been examined and the same has not been found to be satisfactory for the following reasons: 1. REPLY OF THE TAXPAYER HAS NOT BEEN FOUND SATISFACTORY Therefore, your application is rejected in accordance with the provisions of the Act." 4. The petitioner was issued a Show Cause Notice [SCN] for cancellation of registration on the same date and which reads as follows:- "Show Cause Notice for Cancellation of Registration 'Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons: 1. Others Remarks: AS PER LETTER NO. GEXCOM/AE/VRFN/162/2024-AE*-DGARM-CGST-DEL(N)/26813 DATED 01.08.2024. You a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - "others". 7. We had while dealing with the aspect of retrospective cancellation of registration in Riddhi Siddhi Enterprises vs. Commissioner of Goods and Services Tax (CGST), South Delhi & Anr. W.P.(C) 8061/2024 decided on 25 September 2024 and upon examining the scope of Section 29 of the Central Goods and Services Tax Act, 2017 [CGST Act] observed as follows: "5. As is manifest from a reading of Section 29, clauses (a) to (e) of Section 29(2) constitute independent limbs on the basis of which a registration may warrant cancellation. While the provision does enable the respondents to cancel that registration with retrospective effect, the mere existence or conferral of that power would not justify a revocation of registration. The order under Section 29(2) must itself reflect the reasons which may have weighed upon the respondents to cancel registration with retrospective effect. Given the deleterious consequences which would ensue and accompany a retroactive cancellation makes it all the more vital that the order be reasoned and demonstrative of due application of mind. It is also necessary to observe that the mere existence of such a power would not in itself be suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths. The show cause notice requires the petitioner to appear before the undersigned i.e. authority issuing the notice. Notice does not give the name of the officer or place or time where the petitioner has to appear. 5. Further the order dated 13.07.2022 passed on the show cause notice does not give any reasons for cancellation of the registration. It, however, states that the registration is liable to be cancelled for the following reason "whereas no reply to notice to show cause has been submitted''. However, the said order in itself is contradictory, the order states "reference to your reply dated 16.04.2022 in response to the notice to show cause dated 07.04.2022" and the reason stated for cancellation is "whereas no reply to notice to show cause has been submitted''. The order further states that effective date of cancellation of registration is 01.07.2017 i.e. retrospective date. 6. Neither the show cause notice, nor the order spell out the reasons for retrospective cancellation. In fact, in our view, order dated 13.07.2022 does not qualify as an order of cancellation of registration. 7. As per the petitioner, the said order reflected that the GST of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is restored, subject to petitioner filing requisite returns upto date. 13. It is clarified that since the petitioner could not have filed the return after the GST registration was suspended, there shall be no liability to pay any penalty or fine for delayed filing. However, this would only apply in case petitioner files an affidavit of undertaking that petitioner has not carried out any business or raised invoices or taken any Input Tax Credit after the registration was suspended with effect from 07.04.2022 i.e., the date of suspension of the registration. 14. Respondent would be at liberty to initiate appropriate proceedings in accordance with law after giving a proper show cause notice containing complete details, if so advised. Further this order would not preclude the respondent from initiating any steps in accordance with law, if it is found that the petitioner had violated any provisions of the Act. 15. Petition is disposed of in the above terms." 7. We further take note of the judgment in Delhi Polymers vs Commissioner, Trade and Taxes & Anr. wherein the following was observed:- "1. Petitioner has filed the appeal impugning order of cancellation of registration d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 8. He further submits that the petitioner is no longer interested in continuing the business and the business has been discontinued. 9. 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. 10. 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, we do not consider it apposite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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