Facts of the Case

The petitioner, Aditya Narayan Ojha (Amit Associates), challenged the non-compliance of an Order-in-Appeal dated 07.01.2022, through which the appellate authority had revoked cancellation of GST registration.

  • GST registration was originally cancelled via order dated 10.10.2021, based on a show cause notice dated 28.09.2021 alleging fraud, misstatement, or suppression of facts.
  • The petitioner failed to respond to the SCN or appear before the authority.
  • The cancellation order incorrectly referred to a reply that was never filed.
  • On appeal, the appellate authority:
    • Found default was not wilful
    • Accepted petitioner’s undertaking to file pending returns and pay dues
    • Held sufficient cause existed for revocation

Despite this, the department failed to implement the appellate order, leading to the present writ petition.

Issues Involved

  1. Whether the revenue authorities can delay or refuse compliance with an appellate order revoking GST registration.
  2. Whether new grounds introduced in a counter-affidavit can justify cancellation when not mentioned in the original order.
  3. Whether cancellation of GST registration without proper procedural compliance (including notice for inspection under Rule 25 CGST Rules) is valid.

Petitioner’s Arguments

  • The appellate order dated 07.01.2022 remains unimplemented, causing severe prejudice.
  • Without GST registration:
    • Business operations are halted
    • Statutory compliances cannot be fulfilled
  • No tax, interest, or penalty was outstanding at the time of cancellation.
  • Undertaking already given to clear any dues and file pending returns.
  • No notice of physical inspection was served.
  • The cancellation order cited only “no response received”, whereas:
    • The department later introduced non-existence of business premises in its counter-affidavit
  • It is settled law that an order cannot be improved through a counter-affidavit.

Respondent’s Arguments

  • The department intended to challenge the appellate order.
  • Due to non-constitution of the GST Appellate Tribunal, it considered filing a writ petition.
  • However, no effective steps were taken despite liberty granted by the Court.

Court’s Findings

The Delhi High Court held:

  • The cancellation order dated 10.10.2021 only cited non-response, and did not mention non-existence of business premises.
  • Grounds introduced later in the counter-affidavit are not sustainable.
  • Under Rule 25 of the CGST Rules, 2017, notice is mandatory before inspection—this was not followed.
  • The appellate authority had already:
    • Evaluated evidence
    • Accepted undertaking
    • Provided valid reasoning for revocation
  • The revenue authorities failed to challenge the appellate order within reasonable time, despite liberty granted.

Thus, there was no justification for non-compliance with the appellate order.

Court Order / Final Decision

  • The writ petition was disposed of with directions:
    • The respondents shall restore GST registration of the petitioner
    • Restoration must be completed within one week from receipt of the judgment

Important Clarifications

  • Authorities cannot bypass or delay compliance of appellate orders without legal challenge.
  • Counter-affidavit cannot supplement or improve reasons missing in the original order.
  • Cancellation of GST registration must strictly comply with procedural safeguards, including notice requirements.
  • Undertaking by taxpayer and absence of wilful default are valid grounds for revocation of cancellation.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3053-DB/RAS02082022CW85082022_212747.pdf

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