Rekha Saxena vs. Commissioner Of Central Goods And Services Tax Delhi West & Ors.

Held

The Court held that the order dated 16.09.2019 cancelling the petitioner's GST registration was passed without due application of mind. This was evident from the contradictory statements within the order, which referred to a reply filed by the petitioner while simultaneously stating that no reply was filed. The Court noted that such orders have serious implications for registrants and should be carefully drafted, not relying on system-generated templates. Consequently, the Court set aside both the order of cancellation dated 16.09.2019 and the appellate order dated 29.09.2022. The matter was remitted to the Appellate Authority to examine it on merits. However, before proceeding, the petitioner was required to deposit the outstanding tax, along with applicable interest and fine. The Appellate Authority was directed to proceed only after being satisfied with the deposit of the deficit amount and then pass appropriate orders.

Facts

The petitioner, Rekha Saxena, challenged two orders: an order dated 16.09.2019 by the Commissioner of Central Goods and Services Tax Delhi West & Ors. cancelling her GST registration, and an order dated 29.09.2022 by the Appellate Authority dismissing her appeal against the cancellation. The cancellation order dated 16.09.2019 was issued after a show-cause notice dated 02.09.2019. The petitioner filed an appeal against the cancellation order after a delay of approximately 2 years and 8 months. The Appellate Authority dismissed the appeal primarily on the grounds of limitation under Section 107(1) of the CGST Act, 2017. The petitioner sought quashing of both orders and a declaration that Rule 21(h) of the CGST Rules, 2017, was ultra vires, though this latter prayer was later not pressed.

Key Issues

1. Whether the order dated 16.09.2019 cancelling the petitioner's GST registration was passed with due application of mind, considering the contradictory statements within it regarding the petitioner's reply to the show-cause notice (turning on Section 29 of the CGST Act, 2017 and principles of natural justice)? 2. Whether the Appellate Authority erred in dismissing the petitioner's appeal solely on the grounds of limitation, given the circumstances and the petitioner's willingness to rectify her defaults (turning on Section 107(1) of the CGST Act, 2017)? Petitioner's arguments: The petitioner argued that the cancellation order was passed without due application of mind, as evidenced by contradictory statements within the order itself. She also expressed willingness to pay the outstanding tax, interest, and fine for the period returns were not filed. The petitioner did not press the challenge to Rule 21(h). Revenue's arguments: The judgment does not record specific arguments from the revenue or state authorities regarding the merits of the cancellation order or the appeal dismissal, beyond their representation in court.