The Delhi High Court in the case RS Wires Industries Versus Sales Tax Officer Class observed and has quashed the order cancelling GST registration with retrospective effect, bereft of reasons.
The bench comprising of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja in the case observed and has stated that one of the consequences of cancelling the registration of taxpayer’s with retrospective effect is that the taxpayer’s customers are being denied the input tax credit availed in respect of the supplies made by the taxpayer during such a period.
In the present case, the petitioner or assessee has challenged the show cause for cancellation dated 18.01.2022, and the orders of rejection and applications for revocation of cancellation dated 30.08.2023.
It has been submitted by the assessee before the court that the show cause notice has been issued under Section 29 of the Goods and Services Tax Act, 2017 was itself defective as it did not give any details of the alleged wrongful Av ailment or utilisation of input tax credit.
Further, the assessee contended before the court that the how cause notice dated April 18, 2022, did not give any details; thus, it mentioned the details were enclosed and that what was enclosed with the show cause notice was a mere photograph of an unknown individual.
Therefore, the revocation applications were filed, which were rejected by the order without any reason and the reply of the petitioner has been examined, but the same has not been found to be satisfactory for the reason that “the reason entered for revocation of cancellation is not appropriate.
It has also been contended by the court that there is nothing available on record either in the show cause notice or the orders as to the alleged wrongful Av ailment or utilization of input tax credit.
The court stated that at this ground alone, the show cause notice as well as the application seeking revocation are not sustainable.
The court while considering the facts and circumstances of the case stated that there is no material on record to show why the registration was sought to be cancelled retrospectively and there being no material to show that there was any wrongful Av ailment or utilization of input tax credit effective from the date of registration until the issuance of the show cause notice. The counsel, Advocate R. P. Singh appeared for the petitioner.
The counsel, Advocate Rajeev Aggarwal represented the respondent.