M/S Zubiya Enterprises (Through Its Proprietor Jahid Qureshi) vs. Sales Tax Officer Class-Ii/ Avato Ward 74 Zone 7
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The petitioner, M/s Zubiya Enterprises, filed a writ petition challenging an order dated December 10, 2023, which cancelled its GST registration. The cancellation was based on a Show Cause Notice (SCN) dated November 28, 2023, citing three reasons: non-conduct of business from the declared place, issuance of invoices without supply of goods/services, and a letter from another officer. The petitioner was directed to reply within seven working days and appear on December 7, 2023. The petitioner did not respond, leading to the cancellation. The petitioner stated that it had applied for an amendment to its GST registration to reflect a change in its principal place of business on November 27, 2023, which was allowed on December 19, 2023. The petitioner believed this addressed the SCN's concerns.
Held
The Court held that the impugned order cancelling the petitioner's GST registration was liable to be set aside due to procedural deficiencies. The Court noted that the SCN lacked specific details regarding the allegation of issuing invoices without supply and failed to annex a referenced letter dated November 22, 2023. Crucially, the Proper Officer had not considered the petitioner's application to amend its principal place of business, filed prior to the SCN, which the petitioner believed addressed the issue of its unavailability at the declared address. The Court found it apposite to set aside the impugned order and grant the petitioner one more opportunity to respond to the SCN. The petitioner was directed to file its response within two weeks, and the Proper Officer was instructed to consider it, pass an appropriate order, and afford the petitioner a hearing. The Court also noted that the petitioner would need to satisfy the Proper Officer that invoices raised were for real supplies.
Key Issues
1. Whether the impugned order cancelling the petitioner's GST registration is liable to be set aside on account of procedural deficiencies in the Show Cause Notice (SCN) and the Proper Officer's failure to consider material facts, particularly in light of the petitioner's subsequent application for amendment of its principal place of business? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness under the CGST Act, 2017/DGST Act, 2017). Petitioner's arguments: The petitioner contended that the SCN was deficient as it lacked details regarding the allegation of issuing invoices without supply and did not annex a referenced letter dated November 22, 2023. Furthermore, the petitioner argued that the Proper Officer failed to consider the application for amendment of the principal place of business, filed before the SCN, which it believed addressed the core issue of non-availability at the declared address. Respondent's arguments: The respondent (Sales Tax Officer) did not record any specific arguments in the judgment. However, the cancellation order implies reliance on the reasons stated in the SCN.
Sections Cited
Section 129, Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R
Issue notice.
Learned counsel for the respondent accepts notice.
The petitioner has filed the present petition impugning an order dated 10.12.2023(hereafter the impugned order) whereby the petitioner’s GST registration was cancelled principally for the reasons that the petitioner was found unavailable at his place of business.
The impugned order was passed pursuant to a Show Cause Notice dated 28.11.2023(hereafter the impugned SCN), whereby it was proposed to cancel petitioner’s GST registration for three reasons: (i) that the petitioner had not conducted business from his declared place of business; (ii) that it had issued invoices without supply of goods and services or 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 02/08/2024 at 11:39:08
both in violation of the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017)/Delhi Goods and Services Tax Act, 2017 (DGST Act, 2017); and (iii) that a letter dated 22.11.2023 was issued by another officer.
The petitioner was called upon to reply to the aforementioned impugned SCN within a period of seven working days and was directed to appear before the concerned officer on 07.12.2023 at 15:42 hours. Additionally, the petitioner’s GST registration was suspended.
Concededly, the petitioner did not respond to the impugned SCN and consequently, the petitioner’s GST was cancelled by the impugned order.
The petitioner states that prior to the issuance of the impugned SCN, the petitioner had sought an amendment of its GST registration to reflect a change in its principal place of business. The said application was made on 27.11.2023 and was allowed by the order dated 19.12.2023. 8. Learned counsel for the petitioner submits that the petitioner believed that the issue raised in the impugned SCN was addressed.
In so far as the change in principal place of business is concerned, it does not appear that the Proper Officer has considered the fact that the petitioner had, prior to issuance of the impugned SCN, changed its place of business.
The impugned SCN is also deficient in certain aspects.
Although it alleges that the petitioner has issued invoices without supply of goods, no further details regarding this allegation is stated in impugned SCN. Further, the impugned SCN mentions that a letter dated 22.11.2023, was issued by another officer [AC(AV), CGST, Delhi East]. However, copy of the said letter is not annexed with the impugned SCN. 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 02/08/2024 at 11:39:08
In view of the above, we consider it apposite to set aside the impugned order and direct that the petitioner be afforded one more opportunity to respond to the impugned SCN.
Since an allegation has been made that the petitioner had raised invoices without goods, the petitioner would also be required to satisfy the Proper Officer that the invoices raised by him were in respect of real supplies.
The petitioner may file response to the impugned SCN within a period of two weeks from date.
The Proper Officer shall consider the response and pass an appropriate order after affording the petitioner an opportunity of hearing.
The petition is disposed of in the aforesaid terms.
All pending application/s also stand disposed of.
VIBHU BAKHRU, J
SACHIN DATTA, J JULY 26, 2024/cl
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 02/08/2024 at 11:39:08
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.