Facts of the Case

The petitioner, FADA Trading Private Limited, challenged the order dated 26.10.2021 passed by the Appellate Authority (Delhi GST)/Special Commissioner-II, Department of Trade and Taxes, dismissing its appeal on the ground of limitation. The appeal had been filed against an order dated 11.12.2019 cancelling the petitioner's GST registration, itself preceded by a show cause notice dated 02.12.2019. The petitioner's case was that neither the show cause notice nor the subsequent cancellation order was ever received, attributable to the then directors of the company being at cross purposes at the relevant time. The High Court of Delhi disposed of the matter on 07.04.2022, treating the writ petition along with connected application CM No.3560/2022.

Issues Involved

  1. Whether the appeal against cancellation of GST registration was rightly dismissed on the ground of limitation, in view of the Supreme Court's order extending limitation during the COVID-19 pandemic.
  2. Whether the show cause notice dated 02.12.2019 and the consequent cancellation order dated 11.12.2019 could be sustained given their deficiencies.

Petitioner's Arguments

  • The appeal could not have been dismissed on the ground of limitation in view of the Supreme Court's order dated 27.04.2021 in suo motu W.P.(C) No.3/2020, reiterated by its subsequent order dated 10.01.2022, and the CBIC Circular dated 20.07.2021.
  • The show cause notice dated 02.12.2019 gave no date or time for the petitioner's authorised representative to appear for a personal hearing before the adjudicating authority.
  • Neither the show cause notice nor the order cancelling the GST registration was ever received by the petitioner, due to the then directors being at cross purposes.
  • The order dated 11.12.2019 cancelling the registration itself showed that no demand was outstanding against the petitioner.

Respondent's Arguments

  • Counsel for the respondents could not but accept that the Supreme Court's order dated 27.04.2021 on limitation would apply, in view of the CBIC circular dated 20.07.2021.

Court Order/Findings

  • The Supreme Court's suo motu extension of limitation applied to the appeal, so its dismissal on that ground could not stand.
  • Ordinarily the Court would have remitted the matter to the appellate authority for a decision on merits, but since the show cause notice was "completely deficient in material particulars" — giving no date or time for personal hearing — no purpose would be served by such a remand.
  • A perusal of the cancellation order dated 11.12.2019 showed that, in fact, no demand was outstanding against the petitioner.
  • The Court set aside both the appellate order dated 26.10.2021 and the order dated 11.12.2019 cancelling the petitioner's GST registration.
  • The petitioner's GST registration was directed to be restored, subject to the respondents thereafter taking any further steps permissible in law, and not later than ten days from receipt of the judgment.

Important Clarification

  • The Supreme Court's suo motu limitation-extension order (W.P.(C) No.3/2020) applies to GST appellate proceedings, and an appeal cannot be dismissed as time-barred where that extension covers the relevant period.
  • A show cause notice for cancellation of GST registration that omits the date and time for personal hearing is deficient in material particulars; where such deficiency, combined with an absence of outstanding demand, makes remand pointless, a court may directly set aside the cancellation rather than remit the matter.

Sections Involved

  • The order does not cite specific section numbers of the Central Goods and Services Tax Act, 2017; the dispute concerns cancellation of registration, the appellate remedy against such cancellation, and the show cause notice/hearing requirements attending cancellation.

Decision – In Favour of

In favour of the Assessee. The Court set aside both the appellate order dismissing the appeal on limitation and the order cancelling the petitioner's GST registration, and directed restoration of the registration within ten days, subject to the respondents taking any further steps otherwise permissible in law.

Related Case Laws

No related case laws are available on this site at present.

Case Details

  • Court: High Court of Delhi
  • Case No.: W.P.(C) 1212/2022 & CM No.3560/2022
  • Coram: Hon'ble Mr. Justice Rajiv Shakdher and Hon'ble Ms. Justice Poonam A. Bamba
  • Date of Order: 07.04.2022
  • Neutral Citation: 2022/DHC/001286

Link to Download the Order

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