2024 (3) TMI 962 - HC - GST

GST Registration Cancellation Overturned: Portal Access Limitations Invalidate Retrospective Cancellation from July 2017

Goyal Metal Industries, Proprietor Vikram Singh Jai Prakash Gupta Versus Principal Commissioner Of GST, Department Of Trade And Taxes, New Delhi

HC found the retrospective GST registration cancellation from 01.07.2017 unsustainable, as the petitioner could not access the portal or respond to ... Retrospective cancellation of GST registration of petitioner - petitioner could not respond to the SCN as the petitioner could not access the GST portal - HELD THAT:- The impugned order dated 11.12.2023 has been passed merely on the ground that no reply has been received from the taxpayer - It is not in dispute that once the registration is cancelled retrospectively, the taxpayer is not in a position to access the portal; become aware of any notice or respond thereto. In the instant case, since the GST portal shows that the registration of the petitioner has been cancelled retrospectively with effect from 01.07.2017, petitioner would not have been able to receive the show cause notice or access the portal to become aware of any show cause notice or respond thereto. Since both the petitioner as well as respondent want the registration to be cancelled, though for different reasons, the interest of justice requires that the registration of the petitioner be deemed to be cancelled with effect from 01.01.2018 i.e., the date of the application filed by the Petitioner seeking cancellation of the GST registration - the impugned order dated 11.12.2023 is not sustainable - petition disposed off. Issues:The issues involved in this case are the retrospective cancellation of GST registration and the demand raised against the Petitioner under Section 73 of the Central Goods and Services Tax Act, 2017.Retrospective Cancellation of GST Registration:The Petitioner sought the quashing of an order that cancelled the GST registration retrospectively from 01.07.2017. The Petitioner had applied for cancellation of GST registration with effect from 01.01.2018 as they had ceased business activities by 31.12.2017 and had filed returns till that period. The Respondent acknowledged that the registration had been cancelled retrospectively from 01.07.2017, preventing the Petitioner from accessing the portal or being aware of any notices. The Court found the order cancelling the registration unsustainable due to the inability of the Petitioner to respond to notices post-retrospective cancellation.Demand Raised Under Section 73:The impugned order dated 11.12.2023 was passed as no reply was received from the Petitioner to the Show Cause Notice dated 27.09.2023, resulting in a demand of Rs. 18,51,918.60 including penalty. The Court noted that both the Petitioner and Respondent desired the registration to be cancelled, albeit for different reasons. It deemed it just to cancel the registration from 01.01.2018, the date of the Petitioner's application for cancellation. The Respondent was directed to serve a copy of the Show Cause Notice under Section 73 to the Petitioner for response within two weeks, with the Proper Officer to adjudicate the matter after a personal hearing.Conclusion:The Court set aside the impugned order of retrospective cancellation of GST registration and directed the cancellation with effect from 01.01.2018. The Respondent was instructed to serve the Show Cause Notice to the Petitioner for response within two weeks. The Court clarified that it did not delve into the merits of the contentions, reserving all rights and contentions of the parties. The petition was disposed of accordingly.