M/S A S Garments vs. Commissioner, Delhi Goods And Service Tax
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The petitioner, M/s A S Garments, a sole proprietorship engaged in garment trading, was registered under the CGST Act from July 1, 2017. The petitioner filed GST returns until November 2020, after which business operations ceased. A Show Cause Notice (SCN) was issued on September 2, 2021, for non-filing of returns for six continuous months, suspending registration from that date. The petitioner did not respond to the SCN. Consequently, the respondent passed an order on October 7, 2021, cancelling the petitioner's GST registration retrospectively from the date of its grant, July 1, 2017. The petitioner was not aggrieved by the cancellation itself but by its retrospective effect.
Held
The Court held that the cancellation of the petitioner's GST registration should be operative from September 2, 2021, the date of the Show Cause Notice (SCN), and not from a date prior to it. This decision was based on the concession made by the respondent's counsel, who agreed that since no specific reason was provided for retrospective cancellation, the effective date should be the date of the SCN. The petitioner's counsel did not oppose this submission. Therefore, the impugned order dated October 7, 2021, was modified to reflect the effective date of cancellation as September 2, 2021. The Court clarified that this order would not preclude the respondent from initiating any other action or proceedings as warranted by law, reserving all rights and contentions of the parties. The order was passed with the consent of both parties.
Key Issues
1. Whether the cancellation of GST registration ab initio (from July 1, 2017) is legally sustainable, considering the petitioner ceased business operations in November 2020 and the Show Cause Notice (SCN) was issued on September 2, 2021, suspending registration from that date? The petitioner argued that the cancellation should be effective from the date business ceased (November 1, 2020) or at the latest, from the date of the SCN (September 2, 2021), not retrospectively from the date of registration. The petitioner sought a writ of certiorari to quash the retrospective cancellation or a writ of mandamus to direct cancellation from the date business ceased. The respondent, while not providing a specific reason for the retrospective cancellation, conceded that the cancellation should be operative from the date of the SCN, i.e., September 2, 2021, as no specific reason was given for retrospective cancellation.
Sections Cited
Section 29
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Cause title — parties, addresses and appearances
O R D E R % 02.07.2024
The petitioner has filed the present petition, inter alia, praying as under:- “a) A Writ of Certiorari under Article 226/227 of the Constitution of India quashing/set aside the impugned order dated 07.10.2021 passed by the Respondent to the extent of cancellation of registration ab initio and in furtherance thereof cancelling the GST registration w.e.f., 02.09.2021 i.e., the date of issuance of show cause notice; or/and b) Without prejudice, a Writ of Mandamus under Article 226/227 of the Constitution of India directing the Respondent to cancel the GST registration w.e.f., 01.12.2020 i.e., the date Petitioner ceased to carry on business and failed to file GST returns.”
The petitioner is an individual and was, inter alia, engaged in carrying on the business of trading in garments and other ancillary products, under the name of his sole proprietorship concern, M/s A S Garments. The petitioner was registered under the Central Goods and Services Tax Act, 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 03/07/2025 at 19:18:55
2017 (hereafter the CGST Act) on 01.07.2017 and was assigned the Goods and Services Tax Identification Number (GSTIN) 07ANUPA4701D1ZC.
The petitioner claims that he has complied with the provisions of the Delhi Goods and Services Tax Act, 2017 and the CGST Act and had filed the GST returns till the month of November, 2020. However, he closed down its business thereafter and did not file the GST returns after November 2020. 4. The concerned officer of the respondent issued the Show Cause Notice dated 02.09.2021 (hereafter the SCN) suspending the registration with effect from said date and calling upon the petitioner to show cause why his registration should not be cancelled for not filing the returns for a continuous period of six months. Admittedly, the petitioner did not respond to the SCN. Resultantly, the concerned officer of the respondent passed the impugned order dated 07.10.2021 (hereafter the impugned order) cancelling the GST registration of the petitioner with effect from the date it was granted – 01.07.2017. 5. The petitioner is not aggrieved by the cancellation of his GST registration as he claims that he has stopped carrying on his business. His grievance is that the GST registration has been cancelled retrospectively.
Mr. Aggarawal, learned counsel appearing on behalf of the respondent submits that since no specific reason has been given for cancellation of the GST registration with retrospective effect, the cancellation of the petitioner’s GST registration be made operative from the date of the SCN, that is, with effect from 02.09.2021. 7. The said submission commends to this Court. The learned counsel appearing on behalf of the petitioner also does not oppose the same. 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 03/07/2025 at 19:18:55
In view of the above, the petition is disposed of by directing that the impugned order cancelling the GST registration of the petitioner shall take effect from 02.09.2021 and not from a date prior to the said date. The impugned order stands modified to this extent.
It is clarified that this order shall not preclude the respondent from initiating any other action or proceedings, if warranted, in accordance with law. All rights and contentions of the parties are reserved.
This order is passed with the consent of the learned counsel for the parties. Pending application stands disposed of. VIBHU BAKHRU, J SACHIN DATTA, J JULY 02, 2024 M Click here to check corrigendum, if any 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 03/07/2025 at 19:18:55
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.