Facts of the Case

The petitioner, M/s Hari Enterprises, challenged the order dated 10.01.2024 whereby its GST registration was cancelled by the department.

The petitioner contended that although a Show Cause Notice dated 16.12.2023 was issued proposing cancellation of GST registration, the petitioner could not respond to the same in time. Consequently, the GST registration was cancelled through the impugned order.

Subsequently, the petitioner became aware of another Show Cause Notice dated 15.12.2023, which stated that the petitioner had failed to deposit tax in cash for output supplies exceeding ₹15 lakhs.

Upon realizing the issue, the petitioner deposited ₹4,48,100 on 13.05.2024 and also applied for revocation of cancellation; however, the application was rejected.

Issues Involved

  1. Whether cancellation of GST registration without proper opportunity of hearing violates principles of natural justice.
  2. Whether subsequent compliance by the taxpayer (deposit of tax) warrants reconsideration of cancellation.
  3. Whether the rejection of revocation application was justified in the facts of the case. 

Petitioner’s Arguments

  • The petitioner was not able to respond to the Show Cause Notice due to lack of awareness.
  • The cancellation order was passed without granting a meaningful opportunity to present the case.
  • Upon becoming aware of the deficiency, the petitioner deposited the required tax amount promptly.
  • The rejection of the revocation application was unjustified despite compliance. 

Respondent’s Arguments

  • The department acknowledged that the petitioner had deposited the amount as claimed.
  • It was submitted that in light of the deposit, the department was willing to reconsider the cancellation of GST registration.

Court Findings / Order

  • The Delhi High Court set aside the cancellation order dated 10.01.2024.
  • The matter was remitted back to the proper officer for fresh adjudication of the Show Cause Notice dated 16.12.2023.
  • The Court directed that the matter be re-adjudicated in accordance with law within four weeks.
  • The writ petition was disposed of accordingly.

Important Clarification by Court

  • The Court explicitly clarified that it has not expressed any opinion on the merits of the case.
  • All rights and contentions of both parties were kept open for adjudication before the authority. 

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/62727052024CW71112024_122442.pdf 

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