M/S Hari Enterprises vs. Superintendent, Range 25, CGST, Model Town Division
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The petitioner, M/s Hari Enterprises, challenged an order dated 10.01.2024 issued by the Superintendent, Range 25, CGST, Model Town Division, which cancelled its GST registration. The petitioner stated they became aware of a Show Cause Notice dated 16.12.2023 proposing cancellation but could not respond before the impugned order was passed. They also became aware of a subsequent, more detailed Show Cause Notice dated 15.12.2023, which cited non-payment of tax on output supplies exceeding Rs. 15 Lacs. The petitioner subsequently deposited Rs. 4,48,100/- on 13.05.2024 towards this liability, and an application for revocation of registration was rejected. The respondent confirmed the deposit and indicated the department would re-examine the cancellation.
Held
The Court set aside the order of cancellation dated 10.01.2024. The matter was remitted to the proper officer to re-adjudicate the Show Cause Notice dated 16.12.2023 in accordance with the law within four weeks from the date of the order. The Court explicitly clarified that it had not considered or commented upon the merits of the contentions of either party and reserved all rights and contentions of the parties. The reasoning for setting aside the order was primarily based on the subsequent deposit made by the petitioner and the respondent's acknowledgment of this deposit, leading to a decision to re-examine the issue. The ratio decidendi is that where a significant deposit towards tax liability is made after a cancellation order and the revenue acknowledges it, the matter should be re-adjudicated to ensure fairness and compliance with the law.
Key Issues
1. Whether the cancellation of GST registration by the respondent authority was justified, considering the petitioner's failure to respond to the Show Cause Notice dated 16.12.2023 and the subsequent deposit made by the petitioner. Petitioner's contentions: The petitioner argued that they became aware of the Show Cause Notice late and could not respond. They highlighted that a subsequent, detailed Show Cause Notice dated 15.12.2023 cited non-payment of tax on output supplies exceeding Rs. 15 Lacs. Crucially, the petitioner submitted that they have since made a deposit of Rs. 4,48,100/- on 13.05.2024 towards this liability, and their application for revocation was rejected. They implicitly sought a re-evaluation of the cancellation in light of this deposit. Respondent's contentions: The respondent, through their counsel, confirmed that the deposit made by the petitioner has been received. They stated that in view of this deposit, the department would reconsider the issue of cancellation of GST registration.
Sections Cited
None explicitly mentioned in the provided text, other than general reference to GST registration cancellation and show cause notices.
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Cause title — parties, addresses and appearances
JUDGMENT SANJEEV SACHDEVA, J. (ORAL)
Petitioner impugns order dated 10.01.2024 whereby GST registration of the petitioner has been cancelled.
Learned counsel for petitioner submits that petitioner became aware of the Show Cause Notice dated 16.12.2023 proposing to cancel the GST registration of the petitioner. However, could not respond to the same and thereafter by the impugned order the Show Cause Notice was adjudicated and GST registration cancelled.
He submits that subsequently petitioner became aware of another Show Cause Notice dated 15.12.2023 which was detailed and WP (C) 7111/2024 one of the reason mentioned herein was that the petitioner had not made any cash deposit towards the tax for output supplies made in excess of Rs 15 Lacs. He submits that immediately thereafter petitioner has made a deposit of Rs.4,48,100/- on 13.05.2024. He submits that even the application for revocation was rejected.
Learned counsel for the respondent submits that as per his instructions, the deposit as contended by the petitioner has been duly made. He submits that in view of the said deposit, the department would have re-look at the issue of cancellation of the GST Registration.
In view of the above, the order of cancellation dated 10.01.2024 is set-aside. The matter is remitted to the proper office to readjudicate the show cause notice dated 16.12.2023 in accordance with law within four weeks from today.
It is clarified that this Court has neither considered nor commented upon the merits of the contentions of either party. All rights and contentions of parties are reserved.
The petition is disposed of in the above terms. SANJEEV SACHDEVA, J RAVINDER DUDEJA, J MAY 27, 2024/sk
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.