In W.P. (C) 12649/2023 -DEL HC- Delhi High Court highlights discrepancy between grounds for GST registration cancellation & show cause notice; quashes order for violating principles of natural justice
Justice Vibhu Bakhru & Justice Amit Mahajan [25-09-2023]

Read Order: Kajod Mal V. Commissioner of GST and Anr

Chahat Varma

New Delhi, October 12, 2023: The Delhi High Court has quashed an order cancelling the GST registration of a petitioner for violating the principles of natural justice.

In the matter at hand, the petitioner had challenged an order dated 17.01.2023 that cancelled their GST registration. The cancellation was based on a show-cause notice dated 22.12.2012, where the proper officer proposed the cancellation on the grounds that the taxpayer was non-existent. The final decision to cancel the petitioner's GST registration was made on 17.01.2023. However, this decision was based on the petitioner's failure to file the mandatory GST returns as required under the Central Goods and Services Act, 2017 (CGST Act).

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that it was evident that the ground for cancellation, i.e., the petitioner's failure to file mandatory GST returns, was not the reason originally stated in the show-cause notice dated 22.12.2012, which had proposed the cancellation of the petitioner's GST registration. Furthermore, it was acknowledged that following the issuance of the impugned order, the petitioner had requested the authorities to reevaluate the status of their principal place of business. Subsequently, a physical verification of the principal place of business was conducted, and during this verification, it was established that the petitioner was indeed existent.

Considering the circumstances described, the bench concluded that the impugned order, which cancelled the petitioner's GST registration, could not be upheld. It was determined that the order had been issued in violation of the principles of natural justice. Notably, the petitioner had not been served with any show-cause notice proposing the cancellation of their GST registration on any grounds other than non-existence at the principal place of business.

Consequently, the impugned order dated 17.01.2023 was set aside. The court directed the revenue to promptly reinstate the petitioner's GST registration.