Rajender Parsad Jain (Through Legal Heir Sh. Rajiv Jain) vs. Avato Ward-38, State Goods And Services Tax & Anr.
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The petitioner, represented by the legal heir of the deceased taxpayer, Rajender Parsad Jain, challenged an order dated 04.10.2021 that cancelled the deceased's GST registration retrospectively from 01.07.2017. This cancellation followed a show cause notice (SCN) dated 16.08.2021, which cited the issuance of invoices without supply of goods/services, leading to wrongful availment of input tax credit or refund. The SCN required a reply within seven working days and a personal appearance on 24.08.2021. The taxpayer's GST registration was suspended from the SCN date. An appeal filed on 02.11.2021 against the cancellation order remained undisposed of when the taxpayer passed away on 23.07.2023. The petitioner sought to set aside the retrospective cancellation. The respondents conceded that the order could be modified to be operative from the SCN date.
Held
The Court held that the show cause notice (SCN) dated 16.08.2021 was deficient as it did not provide the necessary particulars, merely reproducing statutory provisions. This lack of specificity, coupled with the insufficient opportunity to respond, rendered the impugned order liable to be set aside. The Court noted that the petitioner was primarily aggrieved by the retrospective cancellation of the GST registration, not its restoration. The respondents conceded that the order could be modified to be operative from the date of the SCN. Consequently, the Court directed that the cancellation of the GST registration of the deceased taxpayer shall take effect from 16.08.2021, the date of the SCN, instead of the original retrospective date of 01.07.2017. This modification would not preclude the respondent authorities from initiating any proceedings for statutory non-compliance or recovery of dues in accordance with law. The issue of the validity of the SCN itself was not fully adjudicated upon, but the retrospective effect was modified based on the concession.
Key Issues
1. Whether the show cause notice dated 16.08.2021, which merely reproduced statutory provisions without providing specific particulars, was sufficient to initiate proceedings for cancellation of GST registration under the relevant provisions of the CGST Act, 2017 and the Delhi GST Act, 2017? 2. Whether the cancellation of GST registration with retrospective effect from 01.07.2017 was justified, considering the lack of specific details in the SCN and the subsequent death of the taxpayer? Petitioner's Contentions: The petitioner argued that the SCN was bereft of necessary particulars and did not provide sufficient opportunity to respond, rendering the impugned order liable to be set aside. The petitioner's primary grievance was the retrospective cancellation of the GST registration. Revenue's Contentions: The respondents, through their counsel, fairly stated that the impugned order could be modified to be operative from the date of the SCN, while reserving their right to initiate further proceedings if necessary.
Sections Cited
Section 164
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Cause title — parties, addresses and appearances
O R D E R %
2024
The petitioner has filed the present petition, inter alia, impugning the order dated 04.10.2021 (hereafter the impugned order), whereby the GST registration of the deceased taxpayer namely Rajender Parsad Jain (father of the petitioner) was cancelled with retrospective effect from 01.07.2017. The impugned order was passed pursuant to a show cause notice dated 16.08.2021 (hereafter the SCN). The reason set out in the SCN for proposing to cancel the GST registration is set out below:- “1 Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax.”
The noticee (the petitioner‟s father since deceased) was called upon to furnish a reply to the SCN within a period of seven working days and to 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 07/09/2024 at 14:33:42
appear before the proper officer on 24.08.2021. Additionally, the taxpayer‟s GST registration was also suspended with effect from the date of the SCN.
The taxpayer filed an appeal against the impugned order on 02.11.2021. The petitioner states that the said appeal has not been disposed of as yet. In the meanwhile, on 23.07.2023, the petitioner‟s father expired.
In the aforesaid circumstances, the petitioner has filed the present petition assailing the impugned order.
It is apparent from the SCN that it does not provide the necessary particulars. It merely reproduces the statutory provisions which, according to the proper officer, enabled it to cancel the taxpayer‟s GST registration. Not only is the SCN bereft of any particulars, it also did not provide sufficient opportunity to the taxpayer to respond to the same. In this view, the impugned order is also liable to be set aside.
Having stated above, it is material to note that the petitioner does not seek restoration of the GST registration in favour of his deceased father. He is essentially aggrieved by the cancellation of the GST Registration with retrospective effect.
Mr. Rajeev Aggarwal, the learned counsel appearing for respondents fairly states that the impugned order may be modified to be operative from the date of the SCN while reserving the rights of the respondents to initiate further proceedings, if necessary.
In view of the above, we direct that the cancellation of the GST registration of the petitioner‟s deceased father shall take effect from 16.08.2021, being the date of the SCN, and not with effect from 01.07.2017. 9. We also clarify that this would not preclude the respondent authorities from initiating any proceedings, if necessary, for statutory non-compliance 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 07/09/2024 at 14:33:42
of recovery of dues or otherwise, in accordance with law.
The present petition is disposed of in the aforesaid terms.
VIBHU BAKHRU, J
SACHIN DATTA, J SEPTEMBER 04, 2024 r 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 07/09/2024 at 14:33:42
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.