Sunplast INDIA Through Its Proprietor Gulab Nagar vs. Avato Ward 26 State Goods And Service Tax & Anr.

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W.P.(C)/17762/2024HC DelhiGSTCNR DLHC01097589202424 January 2025Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR3 pages

For Petitioner: Mr. Anurag Rajput, Mr. Sahil Puri, Mr. Sahib Rajput, Mr. Dhruv Bhardwaj and Mr. Hardik Saxena, AdvsFor Respondent: Mr. Avishkar Singhvi, ASC along with Ms. Divya Prabha Singh, Mr. Vivek Kr. Singh, Mr. Naved Ahmed and Ms. Sakshi Raman, Advs

AI SummaryAllowed

Facts

The petitioner, Sunplast India, through its proprietor Gulab Nagar, filed a writ petition challenging an order dated 20 November 2024. This order rejected the petitioner's application for voluntary cancellation of its Goods and Services Tax (GST) registration. The impugned order, issued by the Avato Ward 26 State Goods and Service Tax authority, failed to provide any specific reasons for the rejection. The order merely stated that the petitioner's reply, filed on 13 August 2024, was "not found to be satisfactory" without elaborating on the deficiencies. The petitioner argued that the rejection order was devoid of any reasoning, making it unsustainable.

Held

The Court held that the impugned order dated 20 November 2024, rejecting the petitioner's application for voluntary cancellation of GST registration, is unsustainable. The Court found that the order failed to assign any reasons whatsoever to justify the rejection. The Court emphasized that a reasoned order is crucial, and the absence of any explanation for not acceding to the prayer for voluntary cancellation rendered the order arbitrary. Consequently, the writ petition was allowed, and the impugned order was quashed. The Court directed that the application for cancellation be taken up for consideration afresh and disposed of by the competent authority in accordance with the law. All rights and contentions of the respective parties on merits were kept open.

Key Issues

1. Whether the order dated 20 November 2024, rejecting the petitioner's application for voluntary cancellation of GST registration, is sustainable in law, considering it lacks specific reasons for rejection? (Question of law) The petitioner contended that the impugned order is unsustainable as it fails to assign any reasons for rejecting the application for voluntary cancellation of GST registration. The petitioner argued that a reasoned order is a fundamental principle of natural justice and that the absence of reasons renders the order arbitrary and liable to be quashed. The respondents, represented by the State Goods and Service Tax authority, did not appear to have presented any specific arguments against the petitioner's claim regarding the lack of reasons in the impugned order. The judgment states that the impugned order fails to assign any reason whatsoever.

Sections Cited

Rule 9(4)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17762/2024 SUNPLAST INDIA THROUGH ITS PROPRIETOR GULAB NAGAR .....Petitioner Through: Mr. Anurag Rajput, Mr. Sahil Puri, Mr. Sahib Rajput, Mr. Dhruv Bhardwaj and Mr. Hardik Saxena, Advs. Versus AVATO WARD 26 STATE GOODS AND SERVICE TAX & ANR. .....Respondents Through: Mr. Avishkar Singhvi, ASC along with Ms. Divya Prabha Singh, Mr. Vivek Kr. Singh, Mr. Naved Ahmed and Ms. Sakshi Raman, Advs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

O R D E R %

24.01.

2025

CM APPL. 75529/2024 (EX.) Allowed, subject to all just exceptions. The application stands disposed of. W.P.(C) 17762/2024

This writ petition has been preferred impugning the order dated 20 November 2024 pursuant to which the application made by the writ 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 21:21:30

petitioner for voluntary cancellation of its Goods and Services Tax [„GST’] registration has come to be rejected.

We find that the impugned order fails to assign any reason whatsoever and which may have indicated what could have possibly weighed upon the respondents in not acceding to the prayer for voluntary cancellation.

This becomes apparent from a perusal of the impugned order which reads thus:-

“Form GST REG-05

[See Rule 9(4)]

Reference Number: ZA07112408 1 860N Date:20/11/2024

To GULAB NAGAR

459/B, New Delhi, DALHAI MOHALLA GALI No. 13 AND 14, Central Delhi, Delhi, 110006 GSTIN (If available)- 07BDJPN3918B1ZP

Order of Rejection of Application for Cancellation

This has reference to your reply filed vide ARN AA0708240386317 dated 13/08/2024. The reply has been examined and the same has not been found to be satisfactory for the following reasons:

Therefore, your application is rejected in accordance with the provisions of the Act.”

In view of the aforesaid, we find ourselves unable to sustain the order impugned.

The writ petition is accordingly allowed. The impugned order dated 20 November 2024 is hereby quashed. The application for cancellation as made shall consequently be taken up for consideration afresh and be disposed of by the competent authority in accordance 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 21:21:30

with law.

All rights and contentions of respective parties on merits are kept open.

YASHWANT VARMA, J.

HARISH VAIDYANATHAN SHANKAR, J. JANUARY 24, 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 21:21:30

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.