Md Mustafa Raza vs. Superintendent Range 21 Central Goods And Service Tax & Anr.
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The petitioner, MD Mustafa Raza, challenged an order dated January 6, 2024, which cancelled his GST registration retrospectively from March 1, 2023. The petitioner sought a direction to the respondent to allow his application for revocation of this cancellation, filed on January 16, 2024. A Show Cause Notice dated October 11, 2023, was issued for cancellation, citing failure to furnish returns for a continuous period of six months under Section 39 of the CGST Act, 2017. However, the notice did not specify cogent reasons or inform the petitioner about the retrospective cancellation, thus denying an opportunity to object. The impugned order also lacked specific reasons for cancellation and the retrospective effective date.
Held
The Court noted that the Show Cause Notice dated October 11, 2023, did not specify cogent reasons for cancellation and failed to inform the petitioner about the retrospective cancellation, thereby denying him an opportunity to object. The impugned order dated January 6, 2024, also lacked specific reasons for the retrospective cancellation. The petitioner explained the delay in filing returns due to his father's demise and a change in his accountant. The Court was informed that the petitioner had appeared before the Assistant Commissioner regarding his revocation application. The respondent stated that queries were raised and responded to, and no decision had been taken on the revocation application. The Court disposed of the petition by directing the Proper Officer to decide the petitioner's application for revocation of cancellation within two weeks. The Court clarified that it had not commented on the merits or contentions of either party, reserving all rights and contentions.
Key Issues
1. Whether the Show Cause Notice dated 11.10.2023, which failed to provide cogent reasons for cancellation and did not notify the petitioner of the retrospective nature of the cancellation, was legally valid, particularly in light of Section 39 of the Central Goods and Services Tax Act, 2017? Petitioner's contention: The Show Cause Notice was deficient as it did not specify cogent reasons for cancellation and failed to put the petitioner on notice regarding the retrospective cancellation, thereby violating principles of natural justice. Revenue's contention: The judgment records no specific argument from the respondent regarding the validity of the Show Cause Notice. 2. Whether the order dated 06.01.2024, cancelling the GST registration retrospectively without providing specific reasons for such retrospective cancellation, was justified? Petitioner's contention: The retrospective cancellation was unjustified and lacked proper reasoning. The petitioner also submitted that the delay in filing returns was due to the death of his father on September 28, 2023, and a change in accountant. Revenue's contention: The judgment records that the respondent submitted that certain queries were raised which were responded to by the petitioner, and accordingly, no decision on the revocation application had been taken.
Sections Cited
Section 39
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
W.P.(C) 3328/2024 1. Petitioner impugns order dated 06.01.2024, whereby the GST registration of the petitioner has been cancelled retrospectively with effect from 01.03.2023 and seeks direction to the respondent to allow the application of the petitioner for revocation of cancellation of registration dated 16.01.2024. 2. Show Cause Notice dated 11.10.2023 was issued to Petitioner seeking to cancel its registration. Though the notice does not specify any cogent reason, it merely states “returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017” along with an observation stating, “Failure to furnish returns for a continuous period of six months”. Further, the said Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration.
Thereafter, the impugned order dated 06.01.2024 passed on the Show Cause Notice does not give any reasons for cancellation. It merely states “reference to show cause notice issued dated 11/10/2023” and subsequently states “the effective date of cancellation of your registration is 01/03/2023”. The order states that the effective date of cancellation of registration is 01.03.2023 i.e., a retrospective date. There is no material on record to show as to why W.P.(C) 3328/2024 the registration is sought to be cancelled retrospectively.
Pursuant to impugned order dated 06.01.2024, Petitioner had filed an application for revocation of cancellation of registration dated 16.01.2024 on the ground “Due to non filling of return you have cancelled my GST registration. But reason behind my this delay is my father expired during this period and i also changed my accountant whose delayed my return”
Learned counsel for petitioner submits that the father of the petitioner passed away on 28.09.2023 and he had gone to his native village to perform his father’s last rituals. Therefore, he had not filed his returns on time.
Pursuant to order dated 06.01.2024, we are informed that petitioner had appeared before the Assistant Commissioner on the date and time fixed in support of his application seeking revocation of the cancellation of registration.
Learned counsel for respondent submits that certain queries have been raised which have been responded by the petitioner and accordingly no decision on the application for revocation has been taken.
In view of the above, this petition is disposed of directing the W.P.(C) 3328/2024 Proper Officer to decide the application of the petitioner seeking revocation within a period of two weeks from today.
It is clarified that this Court has neither considered nor commented upon the merits and contentions of the either party. All rights and contentions of the parties are reserved.
Petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
RAVINDER DUDEJA, J MARCH 18, 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.