Order Date – 10 November 2023

Parties: VAB Apparel LLP Vs Commissioner of Delhi GST and ORS

Facts –

• The Petitioner, VAB Apparel LLP, was served with a show cause notice dated 19.05.2022 proposing to cancel the registration of the petitioner’s GST mentioning the reason as “In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts.”
• Though the petitioner was granted seven days to reply the notice the impugned order cancelling the registration was passed on 23.05.2022 with effect from 05.03.2018.

Issue –

• Whether the cancellation of GST registration is valid?

Order –

• The Divisional Bench of Hon’ble High Court observed that It is apparent that the SCN is bereft of any material particulars. It neither specifies the fraud alleged to have been committed by the petitioner nor any alleged wilfull misstatement made by the petitioner. The SCN also did not mention any facts that were allegedly suppressed by the petitioner.
• Although, the petitioner was granted seven working days to respond to the SCN, the Proper Officer did not wait for the said period to expire and the impugned order cancelling the petitioner’s GST registration was passed four days later. The impugned order neither refers to any fraud that was found to have been committed by the petitioner nor mentions any misstatement allegedly made by the petitioner.
• Although the SCN did not propose the cancellation of the petitioner’s GST registration with retrospective effect yet the petitioner’s GST registration has been cancelled with effect from 05.03.2018, that is, the date on which the said registration was granted.
• Merely because the petitioner’s shop was found closed, absent anything more, is not a ground for cancellation of petitioner’s GST registration. The writ petition allowed. The respondents are directed to restore the petitioner’s GST registration.