Issue: A businessman (petitioner) is challenging the cancellation of his GST registration by the government authorities (respondent). The cancellation order was made retrospective, meaning it applied back in time to a date before the order was issued.
Petitioner's Arguments:
- The petitioner claims he was filing GST returns and making payments regularly until his business stopped operating in 2021 due to the death of the proprietor on 15-08-2021.
- The show cause notice, which informed him about the potential cancellation, did not mention any specific reason for the cancellation, let alone a retrospective one.
- The order cancelling the registration is contradictory - it mentions a reply submitted by the petitioner while stating no reply was received.
- The petitioner argues that cancellation with a retrospective date is unfair as it prevents him from claiming tax credits.
Respondent's Implied Argument:
- It is implied that the respondent believes the petitioner failed to file GST returns for a period, justifying the cancellation.
Court's Decision:
- The court acknowledges the petitioner no longer wishes to run the business and modifies the order.
- The registration will be cancelled from the date of the petitioner's passing (August 2021), not retrospectively.
- The petitioner can claim leftover tax credits through proper channels.
- The government can still pursue any taxes owed by the business.
- The issue of business succession is left for a separate legal proceeding.
Conclusion:
In a case of retrospective cancellation of a GST registration, the High Court ruled that the cancellation should only apply from the date the business owner passed away, not from an earlier date as initially ordered by the government. This means the business owner's estate maintains the ability to claim certain tax benefits.
Topic-Ashish Garg L/H of Sh. Pawan Kumar, Proprietor of M/S. Kirti Plastics Versus GST Officer/Avato, Ward 63, Delhi
Citation-2024 TAXONATION 365 (DELHI)
