📰 𝗗𝗲𝗹𝗵𝗶 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗥𝗲𝘁𝗿𝗼𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 𝗖𝗮𝗻𝗰𝗲𝗹𝗹𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗚𝗦𝗧 𝗥𝗲𝗴𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗜𝗹𝗹𝗲𝗴𝗮𝗹 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗦𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝗡𝗼𝘁𝗶𝗰𝗲!

📢 The Delhi High Court ruled that GST registrations cannot be cancelled retrospectively unless explicitly mentioned in the Show Cause Notice (SCN). This decision protects businesses from arbitrary cancellations without proper notice.

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: Aditya Polymers vs Commissioner of Delhi Goods and Services Tax 𝗖𝗮𝘀𝗲 𝗡𝘂𝗺𝗯𝗲𝗿: W.P.(C) 14493/2022 𝗗𝗮𝘁𝗲: 28-Mar-2023

𝗜𝘀𝘀𝘂𝗲: • On 11-Dec-2020, an SCN was issued to Aditya Polymers proposing cancellation of GST registration due to non-filing of returns for six consecutive months. The registration was suspended immediately upon the issuance of the notice. • On 15-Jul-2021, the Proper Officer cancelled the GST registration effective from the original registration date (01-Jul-2017), without prior indication in the SCN that retrospective cancellation would be enforced.

• The petitioner did not apply for revocation of cancellation under Section 30 but instead filed an appeal under Section 107, which was rejected due to the delay in filing. • Aggrieved, the petitioner approached the Delhi High Court challenging the retrospective cancellation.

⚖ 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁 𝗢𝗯𝘀𝗲𝗿𝘃𝗮𝘁𝗶𝗼𝗻𝘀: The court observed that while Section 29(2) of the GST Act allows the proper officer to cancel registration from any retrospective date, this decision cannot be arbitrary. Importantly, if the cancellation is to take effect from a retrospective date, the taxable person must be notified and given an opportunity to respond.

⚖ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: In this case, the SCN did not mention any proposal to cancel the registration with retrospective effect. Thus, the petitioner was deprived of the opportunity to contest the retrospective cancellation. As a result, the Court held that the cancellation would only be effective from 11-Dec-2020, the date the SCN was issued, and not from 01-Jul-2017.

📜 This ruling highlights the necessity of clear communication and fair opportunity for businesses to defend themselves against retrospective GST registration cancellations. Team GSTpanacea 7503031378