M/S Samayshristi Enterprises vs. Superintendent, Range - 31, GST Division, New Delhi.
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The petitioner, M/s Samayshristi Enterprises, engaged in trading ferrous waste, scrap, and stainless steel, sought cancellation of its GST registration effective from November 21, 2023, due to financial stringency. Following the application, the respondent issued a show cause notice on November 22, 2023, requesting additional information, including an address for future correspondence and reconciliation of GSTR-1, GSTR-3B, and GSTR-2A. The petitioner claims to have submitted a response to these queries. However, the respondent, by an order dated January 3, 2024, rejected the petitioner's application for cancellation of GST registration, citing the petitioner's failure to attend a personal hearing and submit a requisite reply.
Held
The Court held that the impugned order dated January 3, 2024, rejecting the petitioner's application for cancellation of GST registration, was unsustainable. The Court found the order to be bereft of any details or reasons, which is a prerequisite for such rejections. Consequently, the Court set aside the impugned order. The Court allowed the petitioner's application for cancellation of GST registration, directing that the registration be treated as cancelled with effect from November 21, 2023, the date of the petitioner's original application. The petitioner was directed to comply with the requirements of Section 29 of the CGST Act, 2017, and furnish requisite details. The Court also clarified that the respondent is not precluded from taking any steps for recovery of any tax, penalty, or interest due in accordance with law. No issue was expressly left undecided.
Key Issues
1. Whether the impugned order dated January 3, 2024, rejecting the petitioner's application for cancellation of GST registration, is sustainable in law, considering it lacks specific details and reasoning, and turns on the interpretation of Section 29 of the CGST Act, 2017? Petitioner's Contention: The petitioner argued that the impugned order is bereft of any details or reasons, rendering it unsustainable. They contended that they had indeed responded to the queries raised by the respondent. The petitioner sought the cancellation of their GST registration due to business closure and financial difficulties. Respondent's Contention: The respondent rejected the application based on the petitioner's alleged failure to attend the personal hearing and submit the requisite reply against the queries raised, as stated in the impugned order.
Sections Cited
Section 29
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT SANJEEV SACHDEVA, J. (ORAL)
Petitioner impugns order dated 03.01.2024 whereby the application seeking cancellation of GST registration of the Petitioner W.P.(C) 2912/2024 has been rejected.
Vide impugned order dated 03.01.2024, petitioner’s application seeking cancellation of GST registration was rejected for the following reason:- “The taxpayer neither attended personal hearing on stipulated date and time nor submitted requisite reply against the query raised. Accordingly, request for cancellation of GST registration is rejected under the provision laid down in Section 29 of CGST Act, 2017.”
Petitioner was engaged in business of trading of ferrous waste, scrap as well as stainless steel and possessed GST registration.
Learned counsel for petitioner submitted that due to financial stringency to continue business, the petitioner had closed down all business activities and was no longer interest in continuing the business. Petitioner filed an application for cancellation of GST registration w.e.f. 21.11.2023. 5. Pursuant to the application, show cause notice dated 22.11.2023 was issued by the respondents seeking additional information/clarification/documents for cancellation of registration stating “1. Basic Details - Others (Please specify) - Please provide/ upload address for future correspondence other than mentioned in W.P.(C) 2912/2024 Principal place of Business. 2 Cancellation Details - Others (Please specify) - Please provide reconciliation of GSTR-1 and GSTR-3B along with GSTR 2A Vs. GSTR-3B.”
As per petitioner, he submitted a response to the queries raised by the Respondent in compliance to the aforesaid notice.
Thereafter, impugned order dated 03.01.2024 rejected the application for cancellation of GST registration. The said order merely states “The taxpayer neither attended personal hearing on stipulated date and time nor submitted requisite reply against the query raised. Accordingly, request for cancellation of GST registration is rejected under the provision laid down in Section 29 of CGST Act, 2017.”
In our view, order dated 03.01.2024 does not qualify as an order rejecting the application seeking cancellation of GST registration as the same is bereft of any details or reasons and accordingly the same cannot be sustained.
In view of the above the order dated 03.01.2024 is set aside. The application of the Petitioner seeking cancellation is allowed. The GST registration of the Petitioner shall now be treated as cancelled with effect from 21.11.2023 i.e., the date when the petitioner applied for cancellation of GST registration. Petitioner shall comply with the W.P.(C) 2912/2024 requirements of Section 29 of the Central Goods and Services Tax Act, 2017 and furnish the requisite details.
It is clarified that Respondents are also not precluded from taking any steps for recovery of any tax, penalty or interest that may be due in respect of the subject firm in accordance with law.
Petition is accordingly disposed of in the above terms.
Order dasti under the signatures of the Court Master.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J FEBRUARY 27, 2024/rs
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.