HC Overturned GST Registration Cancellation Order for Non-Payment of Dues Being Not a Valid Reason Under CGST Act

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  • Last Updated on 14 November, 2024

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GST registration cancellation

Case Details: Subhana Fashion v. Commissioner Delhi Goods and Service Tax - [2024] 168 taxmann.com 107 (Delhi)

Judiciary and Counsel Details

  • Vibhu Bakhru & Sachin Datta, JJ.
  • Pulkit Verma, Upender Sah & Peyush Pruthi, Advs. for the Petitioner.
  • Rajeev Aggarwal, ASC & Shubham Goel, Adv. for the Respondent.

Facts of the Case

The petitioner received a show cause notice (SCN) from the department proposing to cancel GST registration on the ground that it failed to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond a period of three months from the date on which such payment became due. Thereafter, the GST registration was cancelled retrospectively from 01.07.2017 through order dated 02.06.2022 for alleged non-payment of dues. The petitioner filed writ petition against the order of cancellation of registration.

High Court Held

The Honorable High Court noted that the ground for cancellation of registration i.e. non-payment of dues for three months is not a prescribed ground for cancellation under Section 29 of CGST Act or Rule 21 of CGST Rules. Moreover, the impugned order was passed in violation of principles of natural justice as the SCN did not specify date and time for personal hearing. Therefore, it was held that the cancellation order was liable to be set aside and the department was directed to restore registration forthwith.

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