2023 (12) TMI 154 - HC - GST

GST Registration Cancellation Overturned: Legal Representative Wins Appeal Against Retrospective Order Citing Procedural Irregularities

HC ruled in favor of the taxpayer's legal representative, directing GST registration cancellation effective 31.03.2020. The court found the retrospective ... Cancellation of GST registration with retrospective effect - no reply given to SCN - Principles of natural justice - HELD THAT:- The taxpayer’s GST registration was cancelled by the impugned order for the reason that no reply had been given to the Show Cause Notice - the impugned order dated 20.09.2022 is also unsustainable as it is not informed by reason. It is considered apposite to direct that the taxpayer’s GST registration be considered as cancelled w.e.f. 31.03.2020, as was sought by him. Clearly, if a taxpayer has closed down its business, the respondent cannot insist that his GST registration be kept alive and he be held responsible for filing his returns thereafter - petition disposed off. Issues involved: Cancellation of GST registration with retrospective effect and lack of reasons in the impugned order.Cancellation of GST registration with retrospective effect: The legal representative of the taxpayer filed a petition challenging the cancellation of the taxpayer's GST registration with retrospective effect from 01.07.2017 after the taxpayer's demise. The taxpayer had applied for cancellation of GST registration due to discontinuance of business before his death, but the respondent issued a notice after his demise, requesting documents and a reply. The rejection of the application posthumously was deemed unsustainable as the taxpayer could not have provided a reply after his death. The Proper Officer later proposed cancellation due to non-filing of returns for six months, leading to the final cancellation of registration without providing reasons. The court directed the cancellation of GST registration w.e.f. 31.03.2020 as requested by the taxpayer, emphasizing that a taxpayer cannot be held responsible for filing returns after closing down the business.Lack of reasons in the impugned order: The order cancelling the taxpayer's GST registration lacked reasons, making it unsustainable. The court noted that the officer could not have examined a reply that was never furnished, and the absence of stated reasons rendered the order erroneous. The subsequent cancellation based on non-response to a show cause notice was also deemed unsustainable due to the absence of reasons. The court directed the cancellation of GST registration w.e.f. 31.03.2020, highlighting that the lack of reasons in official orders is unacceptable and clarified that the ruling does not prevent the respondent from taking lawful actions in the future.