Central
Goods and Services Tax Act, 2017, Sections 29 & 73
Cancellation
of registration--Neither show cause notice was issued nor opportunity of
personal hearing was given--Validity of
Conclusion: Where the
assessee was neither provided show cause notice nor opportunity of personal
hearing was given to it before cancellation of its GST registration with
retrospective effect, the matter was liable to be remitted to the Proper
Officer for re-adjudication.
GST registration of the assessee was cancelled with
retrospective effect. The assessee submitted that he was not served with the
show cause notice and the assessment order under section 73 of the Act was
passed ex parte after cancellation of its registration. Held:
Department cancelled the registration of assessee retrospectively due to which,
it could not access the GST portal. Consequently, it was unable to file
reply/explanation to the show cause notice within the stipulated period and
could not appear for personal hearing before the Proper Officer on the given
date and time. Accordingly, the matter was remitted to the Proper Officer for
re-adjudication.
Decision: In favour of assessee by way of remand
IN THE DELHI HIGH COURT
SANJEEV SACHDEVA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA
Jain Cement Udyog v. Central Board of Indirect
Taxes, Cus. & Anr.
W.P. (C) No. 3373/2024 & CM. Appls. 13870/2024
4 April, 2024
Petitioner by: R.P. Singh,
Advocate.
Respondents by: Anurag Ojha,
Senior Standing Counsel with Subham Kumar, Advocate for R-1. Rajeev Aggarwal,
Additional Standing Counsel with Prateek Badhwar, Shaguftha H. Badhwar and
Samridh Vats, Advocates.
Sanjeev Sachdeva, J.
Petitioner impugns order dated 4-12-2023, whereby the
impugned Show Cause Notice dated 25-9-2023, proposing a demand of Rs.
7,56,66,476.00 against the Petitioner has been disposed of and a demand
including penalty has been raised against the Petitioner. The order has been
passed under section 73 of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the Act).
2. Issue notice. Notice is
accepted by learned counsel for the respondents. With the consent of parties,
petition is taken up for final disposal.
3. Perusal of the Show Cause
Notice shows that the Department has given separate headings i.e., under
declaration of output tax; excess claim of Input Tax Credit [ ITC ]; and ITC
claimed from cancelled dealers, return defaulters and tax non payers.
4. The impugned order,
however, after recording the narration, records that a demand as ex-parte is
created. It merely states that And whereas, it is noticed that the
Taxpayer neither filed reply/explanation within stipulated period nor appeared
for Personal Hearing before Proper Officer on the given date and time, Further,
another opportunity to submit reply and observing principles of natural
justice, opportunity for Personal Hearing, as per provision of section 75(4)
DGST Act, was also provided to the taxpayer by issuing "REMINDER"
through the GST portal. Now, since no reply I explanation has been received
from the taxpayer despite sufficient and repeated opportunities, which indicate
that the taxpayer has nothing to say in the matter. ***** In view of the
aforesaid circumstances, the undersigned is left with no other option left but
to create demand as ex-parte, in accordance with the provisions of CGST/DGST
Act & Rules, 2017. The Proper Officer has opined that despite
providing another opportunity, neither an online reply has been filed nor has
the petitioner appeared in person or through an authorized representative.
5. Learned counsel for
petitioner submits that the GST registration of the petitioner had been
cancelled retrospectively with effect from 26-7-2017.
6. It is an admitted case of
the Department that in case registration is cancelled retrospectively, the
taxpayer cannot access the portal. Accordingly, there is merit in the
contention of the petitioner that he was not served with the impugned Show
Cause Notice and the impugned order which was issued after the registration was
cancelled.
7. In view of the above, we
are of the view that the impugned order which had been passed solely on account
that petitioner had not filed a reply cannot be sustained. The matter is liable
to be remitted to the Proper Officer for re-adjudication. Accordingly, the
impugned order dated 4-12-2023 is set aside. The matter is remitted to the
Proper Officer for re-adjudication.
8. Petitioner shall file
reply to the Show Cause Notice within 30 days. Thereafter, the Proper Officer
shall re-adjudicate the show cause notice after giving an opportunity of
personal hearing and shall pass a fresh speaking order in accordance with law
within the period prescribed under section 75 (3) of the Act.
9. Learned counsel further
submits that another Show Cause Notice for the same tax period dated 05-4-2023
has been issued by the Directorate General of Goods and Services Intelligence,
Ghaziabad Regional Unit. This order would be without prejudice to the proceedings
already initiated by the Directorate General of Goods and Services
Intelligence, Ghaziabad, Regional Unit and defence of the petitioner thereto.
10. It is clarified that
this Court has neither considered nor commented upon the merits of the
contentions of either party. All rights and contentions of parties are
reserved.
11. The challenge to Notification
No. 9 of 2023 with regard to the initial extension of time is left open.
12. Petition is disposed of
in the above terms.