LI Network
Published on: December 30, 2023 at 13:00 IST
The Delhi High Court has deemed the cancellation of the petitioner’s GST registration as a violation of natural justice principles and has consequently ordered its reversal.
Justices Vibhu Bakhru and Amit Mahajan observed that reinstating the petitioner’s GST registration would necessitate updates to their returns, enabling the department to review all transactions conducted during the cancelled registration period. This addresses concerns regarding undisclosed transactions post-cancellation.
The case involves the petitioner’s challenge against the cancellation of their Goods and Service Tax (GST) registration.
The cancellation stemmed from alleged issuance of invoices without goods or services supplied, resulting in improper utilization of input tax credit or tax refund, as per the respondent’s show cause notice. However, the notice lacked specific details, failing to identify invoices or periods of alleged non-compliance.
The notice also failed to specify the amount of wrongly claimed input tax credit or the tax refund related to the supposedly incorrect invoices. Subsequently, the respondent canceled the registration without providing reasons, citing non-receipt of a reply to the vague show cause notice.
The Court deemed the cancellation order unjust, noting the absence of essential particulars hindering the petitioner’s clarity in responding. Additionally, the petitioner was not granted a proper opportunity to be heard, as the notice lacked specifics for a scheduled hearing.
Consequently, the Court declared the cancellation of the petitioner’s registration as a breach of natural justice principles and directed its annulment.
Case Title: M/S Aaira Batteries v. Principal Commissioner Of Department Of Trade Taxes, Government Of NCT Of Delhi