Ms Sk Enterprises Through Its Proprietor Sh Kanwal Jit Khurana vs. Principal Commissioner CGST
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The petitioner, M/s SK Enterprises, approached the Delhi High Court challenging an order that dismissed its statutory appeal. The appeal was filed against an order dated December 8, 2023, which cancelled the petitioner's GST registration. The appellate authority dismissed the appeal on the grounds that it was filed beyond the maximum period of limitation prescribed under Section 107 of the CGST Act. The petitioner's GST registration was cancelled based on a Show Cause Notice (SCN) alleging that the registration was obtained by fraud, wilful misplacement, and suppression of facts, invoking Section 29(2)(e) of the CGST Act.
Held
The Court held that the appeal filed before the appellate authority was indeed beyond the maximum period of limitation prescribed under Section 107(2) of the CGST Act. Citing its previous judgment in M/s Addichem Speciality LLP vs. Special Commissioner, Department of Trade and Taxes [2025 SCC OnLine Del 646], the Court affirmed that the time frame in Section 107(2) is sacrosanct and does not allow for further condonation of delay. Therefore, the appellate authority's view on limitation was upheld. However, the Court found the order of cancellation dated December 8, 2023, to be unsustainable. This was because the cancellation order failed to assign any reasons, and the Show Cause Notice (SCN) merely made bald allegations under Section 29(2)(e) without referring to any specific material. On this ground alone, the cancellation order was quashed. The Court allowed the writ petition, quashed the cancellation order, and permitted the respondents to initiate fresh proceedings from the SCN stage, requiring them to provide all supporting material to the petitioner and afford an opportunity of hearing.
Key Issues
1. Whether the appeal filed before the appellate authority was barred by limitation under Section 107(2) of the CGST Act, and if the time frame prescribed therein is sacrosanct and does not permit further condonation of delay? - Petitioner's argument: Not explicitly recorded in the judgment. - Revenue's argument: The appeal was preferred after the expiry of the maximum period of limitation prescribed in Section 107(2) of the CGST Act, and this time frame is sacrosanct and does not contemplate further condonation of delay. 2. Whether the order of cancellation of GST registration dated December 8, 2023, assigning no reasons and based on a Show Cause Notice lacking specific material, is sustainable in law? - Petitioner's argument: The order of cancellation and the SCN lacked specific reasons and material to support the allegations of fraud, wilful misplacement, and suppression of facts under Section 29(2)(e) of the CGST Act. - Revenue's argument: Not explicitly recorded in the judgment.
Sections Cited
Section 107, Section 29(2)(e)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2025
CM APPL. 12403/2025 (Ex.)
Allowed, subject to all just exceptions. The application stands disposed of.
W.P.(C) 2606/2025 & CM APPL. 12402/2025 (Direction)
The writ petitioner has approached this Court aggrieved by the order passed by the appellate authority dismissing its statutory appeal and which in turn was instituted seeking to challenge an order dated 08 December 2023 in terms of which the Goods and Services Tax [„GST‟] registration held by the petitioner came to be cancelled.
The order of the appellate authority essentially holds that the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 20:18:01
appeal has been preferred after the expiry of the maximum period of limitation prescribed in Section 107 of the Central Goods and Services Tax Act, 2017 [„CGST Act‟]. We have while rendering judgment in M/s Addichem Speciality LLP vs. Special Commissioner, Department of Trade and Taxes [2025 SCC OnLine Del 646] already held that the time frame as prescribed by Section 107(2) is sacrosanct and does not contemplate further condonation of delay. In that view of the matter, we find no justification to interfere with the view taken by the appellate authority.
However, and as we view the order of cancellation dated 08 December 2023, we find that the same has not assigned any reasons in support of the decision that the GST registration was liable to be cancelled. Even the Show Cause Notice [„SCN‟] only alludes to Section 29(2)(e) and lays a bald allegation of the registration being liable to be cancelled on account of the same having been obtained by means of fraud, wilful misplacement and suppression of facts.
The SCN too fails to allude or refer to any material on the basis of which the tentative opinion of a violation of Section 29(2)(e) was formed. In view of the aforesaid and on this short ground alone, we are of the considered opinion that the order of cancellation dated 08 December 2023 would not sustain.
We, accordingly, allow the instant writ petition and quash the order of 08 December 2023. We, however, leave it open to the respondents to draw proceedings afresh from the stage of issuance of SCN. The respondent shall be obliged to provide to the writ petitioner all material on the basis of which it is contended that Section 29(2)(e) of the CGST Act stood violated. The petitioner shall be afforded an opportunity of hearing before finalization of the aforenoted This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 20:18:01
proceedings.
All rights and contentions of respective parties on merits are kept open.
YASHWANT VARMA, J.
HARISH VAIDYANATHAN SHANKAR, J. MARCH 03, 2025/RW This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 20:18:01
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.