Delhi High Court rules against retrospective registration cancellation in case of non-filing of GST returns for a continuous six months. SATYAM ENTERPRISES vs. COMMISSIONER OF DELHI GOODS & SERVICES TAX

Reason: The Delhi High Court examined the validity of the retrospective cancellation of GST registration for Satyam Enterprises.

The primary issue was that the Show Cause Notice (SCN) and the impugned order did not provide any reasons for retrospectively proposing or deciding to cancel the GST registration from the date the CGST Act came into force.

The only ground mentioned was the non-filing of returns for more than six months, which the court found insufficient to justify retrospective cancellation, especially for periods when the taxpayer had complied with the CGST Act.

Special Directions: The court emphasized that taxpayers must be given a full opportunity to contest proposals to cancel GST registration with retrospective effect. In this case, the absence of stated reasons in the SCN and the impugned order warranted a specific direction.

Conclusion: The court confined the operation of the impugned order to the cancellation of the GST registration from the date of the order itself, rather than retrospectively.

This ensured that the taxpayer’s rights were protected, and the cancellation was only effective from the date of the court’s decision.