The Hon’ble Delhi High Court in M/s. Rakesh Enterprises v. the Principal Commissioner Central Goods and Services Tax & Ors. [W.P. (C) 14250/2022 dated February 9, 2023] has set aside the order for cancellation of GST Registration of the assessee, on the grounds that the order is not sustainable as the reply to the Show Cause Notice (“SCN”) furnished by the assessee was not taken into consideration by the Revenue Department. Directed the Revenue Department to restore the GST Registration of the assessee.
Facts:
This petition has been filed by M/s. Rakesh Enterprises (“the Petitioner”) challenging the order dated December 28, 2020 (“the Impugned Order”) issued by the Revenue Department (“the Respondent”) wherein the GST registration of the Petitioner was cancelled. The Impugned Order was passed in furtherance of proceedings commenced vide the SCN dated December 15, 2020 (“the Impugned SCN”), which was issued due to the non-filing of returns for more than six months. The Petitioner had responded to the Impugned SCN vide a reply dated December 24, 2020 (“the Impugned Reply”), which is also stated in the Impugned Order. However, the Impugned Reply is not filed along with this petition, as a copy of the same is not readily available.
The Respondent contended that according to the case history, there is no evidence that the Petitioner had submitted a reply to the Impugned SCN and that the reference of the Impugned Reply was generated due to a technical glitch in the Impugned Order.
Issue:
Whether the GST Registration of the Petitioner can be cancelled without considering the Impugned Reply to SCN?
Held:
The Hon’ble Delhi High Court in W.P.(C) 14250/2022 held as under:
- Observed that, the counter affidavit filed by the Respondent was inconsistent as the Impugned Reply is accepted as a matter of record. Further, there is no statement in the counter affidavit contending that there is an error in the Impugned Order.
- Stated that, it is not acceptable that the Petitioner had not submitted an Impugned Reply as the same has been referred to in the Impugned Order.
- Further observed that, although the Impugned Order mentions about the Impugned Reply, but it does not indicate the contents thereof nor reflects any discussion in respect of the Petitioner’s explanation therefore, it cannot be sustained.
- Noted that, the Petitioner has submitted their tax returns, although late, and has also paid the required tax and penalty according to the provisions of the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
- Relied on the judgment of the Hon’ble Madras High Court in Suguna Cutpiece Center v. Appellate Deputy Commissioner (ST) (GST), [SALEM: 2022 (61) G.S.T.L. 515 (Mad.)] wherein, it was observed that it is not the intention of the authorities to debar and de-recognise assessees from coming back into the GST fold when the GST registrations of dealers had been cancelled. They had not availed the alternate remedy seeking revocation of the cancellation orders within the time prescribed.
- Held that, the Impugned Order, cancelling the GST registration of the Petitioner, is not sustainable as it does not consider the Petitioner’s response to the Impugned SCN.
- Set aside the Impugned Order.
- Directed the Respondents to restore the Petitioner’s GST Registration.
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