“Can't Be Blind Spectator to Article 14 Breach”: Delhi High Court Sets Aside Retrospective GST Cancellation
The Delhi High Court has set aside the retrospective cancellation of GST registration despite the assessee's/taxpayer's delay in challenging the action, holding that a vague and non-speaking show cause notice denies the opportunity of a hearing to the assessee and violates Article 14 of the Constitution.
A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul observed, “we cannot be a blind spectator to the denial of opportunity of hearing as guaranteed under Article 14 of the Constitution of India to the petitioner. A vague Show Cause Notice is nothing less than a document which is not providing sufficient and complete opportunity of hearing to the parties like the petitioner.”
The court was dealing with a writ petition challenging the cancellation of GST registration with retrospective effect. The revenue opposed the plea on the ground of delay and laches.
Rejecting this objection, the High Court held that constitutional violations cannot be ignored merely because the assessee was late in invoking writ jurisdiction.
The court said it is sensitive to the fact that the petition preferred by the petitioner is time-barred. However, it found that the SCN was completely vague and failed to disclose the foundational facts necessary to enable the assessee to respond effectively.
“In absence of specific cause in the Show Cause Notice, the petitioner is handicapped and is unable to reply to the respondent qua the cause, which is formed to be the basis for the purposes of cancellation of registration of the petitioner's GST with retrospective effect,” the Court said.
Accordingly, it quashed the retrospective GST cancellation order and restored the petitioner's registration. However, it clarified that the authorities would be at liberty to proceed afresh in accordance with the law.
For Petitioner: Paras Chaudhry and Mohd. Amir, Advocates
For Respondents: Sumit K. Batra and Ms. Priyanka Jindal, Advocates