M/s Abhishek Appliance Pvt. Ltd. v. Assistant Commissioner, CGST–Delhi North

Delhi High Court | W.P.(C) 8920/2024 | Decision dated 03.07.2024
Category: Cancellation of GST Registration (Section 29(2), CGST Act)
Impugned Action: Cancellation order dated 06.03.2024 & SCN dated 14.02.2024
Bench: Justice Vibhu Bakhru & Justice Sachin Datta

Facts of the Case (Paras 1–14)

The petitioner challenged the cancellation of its GST registration under order dated 06.03.2024, passed pursuant to a show-cause notice dated 14.02.2024. The notice was issued solely based on a communication from the Anti-Evasion Branch alleging that the taxpayer was not found at its principal place of business during inspection on 12.01.2024. The panchnama showed that the premises were under construction and workers confirmed non-existence of business activity. The officers also contacted Ayush Gupta, who stated he was out of station and that the application for change of principal place of business had earlier been rejected.

The petitioner, however, argued that it had an additional place of business which was never inspected. It further asserted that it applied for change of principal place on 06.02.2024, and an amended certificate was issued on 07.02.2024. Earlier visits in 2021 had confirmed the operation of business at the registered address, disproving any allegation of ab initio non-existence.

Questions / Issues Before the Court

1. Whether the SCN issued solely on the basis of an Anti-Evasion letter, without independent satisfaction of the proper officer, is legally sustainable.

2. Whether the hearing opportunity was illusory since the date of appearance (20.02.2024) was fixed before expiry of the granted seven-day reply period.

3. Whether retrospective cancellation from the date of original registration (02.07.2017) could stand when business operations existed at least till 2021.

4. Whether the petitioner was entitled to a fresh opportunity to respond to the allegation of non-existence at the principal place of business.

Court’s Observations (Paras 7–15)

The Court observed that the SCN simply reproduced the Anti-Evasion Branch’s letter without demonstrating the proper officer’s independent application of mind. The SCN did not disclose the name of the officer or the venue of the hearing, diluting procedural fairness.

The Anti-Evasion communication alleged non-existence based on inspection, but the petitioner had since obtained approval for change of principal place of business on 07.02.2024. The Court noted that cancellation was ordered solely due to non-response to the SCN and that retrospective cancellation lacked foundation when earlier visits (2021) had confirmed operational business.

The respondents conceded that a fresh opportunity was appropriate. The Court accepted this position.

Final Judgment / Verdict (Paras 16–20)

The High Court set aside the cancellation order dated 06.03.2024. It held that only a limited allegation — non-existence at the principal place of business — required determination. The petitioner was directed to file a detailed response with evidence within ten days, and the proper officer was instructed to grant a personal hearing on 24.07.2024. The authorities were directed to take an informed, reasoned decision thereafter.

Between Fine Lines (Trade & Industry Takeaways)

Authorities cannot mechanically cancel GST registration based solely on Anti-Evasion communications. Independent satisfaction, detailed SCN, and meaningful personal hearing are mandatory. Where business premises are under renovation or shifting, taxpayers must maintain updated registration details and documentary trail to prevent adverse inferences during inspections.

Summary of Cases Referred

(This judgment does not cite external precedents; hence the table records “Not Applicable”)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”