2023 Taxo.online 689

“Delhi High Court Reinstates Business After GST Registration Cancellation Controversy!”

Introduction:

In a dramatic legal saga, the Delhi High Court, led by Justices Vibhu Bakhru and Amit Mahajan, has ruled in favor of Kritika Agarwal, sending ripples through the tax and business community. The case revolves around the contentious cancellation of Kritika Agarwal's GST (Goods and Services Tax) registration and her relentless fight for justice.

What Happened:

Kritika Agarwal's ordeal began when the Anti Evasion Staff of Central Tax CGST, Delhi North Commissionerate conducted a search at her premises on September 7, 2022. During this operation, documents were seized, and her father-in-law was compelled to deposit a substantial sum of ₹10,00,000 under pressure. This marked the beginning of a tumultuous legal battle.

Why it Happened:

The crux of the matter lay in the subsequent actions of the tax authorities. Kritika Agarwal received a Show Cause Notice on October 6, 2022, proposing the cancellation of her GST registration. The notice cited her absence from the office on September 19, 2022, when summons were issued under Section 70 of the CGST Act. Kritika promptly responded, explaining that her accountant had visited the office and requested additional time to prepare documents. However, her plea went unanswered.

Analysis & Impact:

The Delhi High Court, in its astute analysis, highlighted the importance of due process and the need for authorities to independently evaluate cases. It stressed that an authority should not act solely based on directions from another authority without conducting an independent assessment. In this case, the Order-in-Original dated October 28, 2022, which canceled Kritika Agarwal's GST registration, had been issued solely on the directions of another authority. Moreover, the court pointed out that the cancellation of GST registration could have severe consequences for a taxpayer's business and should be exercised with caution.

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