ANSH TELECOM THROUGH ITS PROPRIETOR SARITA RANI
VERSUS
COMMISSIONER OF DGST AND ANR.
Citation: 2024 taxo.online 779
The petitioner, Ansh Telecom, challenged an order dated 27.12.2021, which retrospectively canceled its GST registration from 01.07.2017, along with a show cause notice dated 02.09.2021. The notice cited the petitioner's failure to furnish returns under section 39 of the CGST Act, 2017, for a continuous period of six months. However, the notice lacked specificity in reasons and failed to notify the petitioner about the retrospective cancellation. Moreover, the order of cancellation provided contradictory information and lacked reasoning for the retrospective action.
The court observed that cancellation of registration with retrospective effect should be based on objective criteria, not merely on the grounds of non-filing of returns. It emphasized the need for proper justification for retrospective cancellations, considering the adverse impact on the taxpayer's customers' input tax credit. Both the petitioner and the department sought cancellation, albeit for different reasons.
Given the petitioner's cessation of business activities and compliance until March 2021, the court modified the order to cancel registration from the date of the show cause notice issuance. It directed the petitioner to comply with Section 29 of the CGST Act. However, it clarified that the respondents could pursue recovery proceedings, including retrospective cancellation, after issuing a proper show cause notice and providing an opportunity for a hearing.
In essence, the judgment underscores the importance of procedural fairness and substantive justification in departmental decisions, particularly regarding retrospective actions like cancellation of GST registration. It upholds the principle that such actions must be based on objective criteria and provide adequate opportunity for the taxpayer to respond and defend their position.
To read more about this Judgement, subscribe today: https://taxo.online/product/taxo-pro/
Already a subscriber, Click to LOGIN & refer to the TAXO GST CASE LAWS
Or
Call us:- +91 99101 67919, 99996 93426
