GST Update

 Desk of CA. Praveen Sharma – 828 Series (CAPS) 

DELHI HIGH COURT IN THE CASE OF Jasleen Kaur Kapoor (Trade Name – RKD Overseas)

Delhi High Court on Retrospective GST Cancellation

1. The case involved Jasleen Kaur Kapoor, widow of Late Jagjeet Singh Kapoor, whose proprietary firm M/s RKD Overseas had its GST registration cancelled retrospectively from January 2018.

2. Mr. Kapoor, the sole proprietor, passed away in June 2020 during the COVID-19 pandemic. Until then, GST returns had been filed regularly.

3. A show cause notice issued in December 2021 cited non-filing of returns as the reason for cancellation. However, the notice was neither properly served nor mentioned retrospective effect.

4. The Revenue argued the petition was defective since it was initially filed in the name of a deceased person, but the Court noted the wife had already substituted herself in the case.

5. The Court emphasized that retrospective cancellation cannot be applied mechanically and must be based on specific grounds and reasoning, following principles of natural justice.

6. Referring to earlier judgments like Subhana Fashion, Balaji Industries, and Riddhi Siddhi Enterprises, the Court held that cancellation must align with the SCN and not extend to periods when returns were duly filed.

7. The Court directed that the registration stands cancelled only from 1 July 2020, the date business activity ceased, rejecting the retrospective cancellation from 2018.
   
   

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   Regards

   CAPS