Delhi High Court
Inderjeet Kaur vs Union Of India, Through Its Secretary, ... on 9 January, 2024
Author: Sanjeev Sachdeva
Bench: Sanjeev Sachdeva
$~16
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment delivered on: 09.01.2024
+ W.P.(C) 15650/2023 & CM. APPLS. 62658/2023
INDERJEET KAUR ..... Petitioner
Versus
UNION OF INDIA, THROUGH ITS SECRETARY,
GOVERNMENT OF INDIA & ORS. ....Respondents
Advocates who appeared in this case:
For the Petitioner: Mr. Ram Naresh, Mr. Saurabh Malhotra and Mr. Ajay
Jain, Advocates.
For the Respondents: Mr. Gibran Naushad, Senior Standing Counsel for the
Revenue.
CORAM:-
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
SANJEEV SACHDEVA, J. (ORAL)
1. Petitioner seeks quashing of show cause notice dated 02.03.2022, whereby husband of the petitioner was asked to show cause as to why the GST registration of his firm be not cancelled.
2. Petitioner also impugns order dated 04.04.2022, whereby the GST registration of the firm was cancelled retrospectively with effect from 03.07.2017.
3. The subject petition has been filed by Smt. Inderjeet Kaur, wife of late Sh. Narinder Singh, who was the sole proprietor of Hardev Engineering Works and was registered under the Goods and Services
Signature Not Verified Digitally Signed W.P.(C) 15650/2023 Page 1 of 4 By:RASHIM KAPOOR Signing Date:11.01.2024 15:34:26 Tax Act, 2017 (hereinafter referred to as the Act).
4. As per the petitioner, Sh. Narinder Singh expired on 24.08.2021. No GST returns were filed after July, 2021 since Sh. Narinder Singh passed way. Subject show cause notice was issued on 02.03.2022 on the ground that returns were not filed for a continuous period of six months.
5. Learned counsel for respondent submits that the show cause notice though addressed to Sh. Narinder Singh, was uploaded only on the common portal. As per the respondents, notices are not physically sent but are uploaded on the common portal and are treated as deemed service in terms of Section 169 of the Act.
6. Since no reply was received to the show cause notice, the Superintendent passed the impugned order dated 04.04.2022, cancelling the registration with effect from 03.07.2017.
7. Perusal of the show cause notice shows that the same does not give any reason. The notice in fact gives a reason as "1. returns furnished by you under section 39 of the Central Goods and Services Tax Act,2017". In the observation column, there is a noting "failure to furnish returns for a continuous period of six month." Since the husband of the petitioner had expired, notice which was uploaded on the common portal, was not accessible and as was thus not responded to by the petitioner.
Signature Not Verified Digitally Signed W.P.(C) 15650/2023 Page 2 of 4 By:RASHIM KAPOOR Signing Date:11.01.2024 15:34:26
8. Learned counsel for the petitioner submits that the petitioner does not intend to carry on business and the business has been discontinued immediately on the demise of the husband of the petitioner. He submits that she is aggrieved by the retrospective cancellation of the registration as the Input Tax Credit is being denied for the said period.
9. In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. Merely, because a taxpayer has not filed the returns for some period does not mean that the taxpayer's registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.
10. It is important to note that, according to the respondent, one of the consequences for cancelling a tax payer's registration with retrospective effect is that the taxpayer's customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, we do not consider it apposite to examine this aspect but assuming that the respondent's contention in
Signature Not Verified Digitally Signed W.P.(C) 15650/2023 Page 3 of 4 By:RASHIM KAPOOR Signing Date:11.01.2024 15:34:26 this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted.
11. We may also note that the show cause notice did not put the noticee to notice that registration was liable to be cancelled retrospectively and, in any event, as per the online portal of the respondents returns were filed till July, 2021.
12. In view of the fact that petitioner does not seek to carry on business or continue the registration, the impugned order dated 04.04.2022 is modified to the limited extent that registration shall now be treated as cancelled with effect from 24.08.2021 i.e. date of demise of Sh. Surinder Singh. 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.
13. Petition is accordingly disposed of in the above terms.
SANJEEV SACHDEVA, J
JANUARY 09, 2024/NA RAVINDER DUDEJA, J
Signature Not Verified
Digitally Signed W.P.(C) 15650/2023 Page 4 of 4
By:RASHIM KAPOOR
Signing Date:11.01.2024
15:34:26
