Facts of the Case

The petitioner, M/s Shyam Enterprises, obtained GST registration on 17 October 2022. On 29 July 2023, the petitioner applied for cancellation of registration. The Department sought additional information, but no reply was furnished, leading to rejection of the cancellation application. Subsequently, a show cause notice was issued on 11 June 2024 and the registration was suspended. An order dated 8 October 2024 cancelled the registration retrospectively from 17 October 2022. The petitioner applied for revocation on 12 November 2024 and the registration was restored. However, another show cause notice dated 5 December 2024 was issued alleging fraud and mis-statement, culminating in another retrospective cancellation order dated 19 February 2025. A further application for revocation was filed on 14 April 2025, followed by a show cause notice dated 13 May 2025 and rejection of revocation on 30 May 2025. Aggrieved, the petitioner approached the High Court seeking restoration of registration and quashing of the cancellation orders.

Issues Involved

Whether repeated retrospective cancellation of GST registration warranted interference under Article 226, whether the Department acted illegally in cancelling registration from the date of inception, and whether the petitioner deserved restoration of registration despite persistent non-compliance with statutory notices.

Petitioner’s Arguments

The petitioner submitted that it had now taken business premises on rent and was willing to file all pending annual returns. It was argued that cancellation of registration retrospectively from the date of registration was harsh and unjustified and that the registration deserved to be restored to enable compliance.

Respondent’s Arguments

The Revenue opposed the petition, contending that despite repeated opportunities, the petitioner failed to file replies or attend hearings. It was submitted that the petitioner was consistently non-compliant and that no grounds existed for interference in writ jurisdiction. The Department argued that the petitioner was free to apply for a fresh GST registration if it intended to recommence business.

Court Order / Findings

The Delhi High Court examined the detailed chronology and held that the petitioner had been completely recalcitrant and negligent in responding to multiple show cause notices issued over an extended period. The Court observed that despite restoration of registration once, the petitioner again failed to comply, leading to repeated cancellations. In these circumstances, the Court held that the case did not warrant interference under Article 226. The Court accepted the Department’s submission that the petitioner could apply for a fresh GST registration if it so desired.

Important Clarification

The Court clarified that writ jurisdiction is discretionary and cannot be invoked to protect assessees who consistently fail to comply with statutory notices and procedural requirements under the GST regime. Persistent non-compliance disentitles an assessee from equitable relief.

Final Outcome

The writ petition was disposed of without interference. The retrospective cancellation of GST registration was upheld, and the petitioner was granted liberty to apply for a fresh GST registration in accordance with law.

Link to Download Order https://www.mytaxexpert.co.in/uploads/1769497494_MSSHYAMENTERPRISESVsSUPERINTENDENTRANGE136CGSTMANDOLIDIVISIONEASTDELHI.pdf

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