DECEMBER 03, 2025

The Vanishing Taxpayer

By Vijay Kumar

THE curtain rose in Delhi High Court on a drama where a reputed company was made to vanish - not by market forces, but by a bureaucrat's wand.

In Imagine Marketing Ltd Vs Joint Commissioner CGST Appeals, Delhi (2025-TIOL-1873-HC-DEL-GST), the Delhi High Court started its judgement with these words

The present petition reveals a sad situation where a reputed company is being made to deal with an unjustified cancellation of its GST registration.

Imagine Marketing is the parent company of 'boAt' a brand that floats in many ears . But in GST waters, it was sunk without warning.

The Superintendent of Central Tax, Range-56 did a Houdini Act and made the Company disappear. One click, and abracadabra - the Company was gone from the GST universe.

This is how it happened.

A Show Cause Notice (SCN) was issued to the Company on 15th October, 2024 which read as:

Show Cause Notice for Cancellation of Registration

Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:

1. returns furnished by you under section 39 of the Central Goods and Services Tax Act, 2017

Others

Non Existent

You are hereby directed to furnish a reply to the notice within thirty days from the date of service of this notice.

If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.

Please note that your registration stands suspended with effect from

This SCN was less a notice, more a riddle. "Others. Non - existent." That's not reasoning, that's a bureaucratic puzzle dressed up as law.

The SCN allowed 30 days to file a reply. The Company filed a reply within two weeks on 28th October, 2024 and gave all the details including the rent agreements of the Petitioner and the returns for the last three months.

Despite all the detailed documents having been furnished within the time stipulated, the Adjudicating Authority passed an order with one remark to the effect:

Order for Cancellation of Registration

This has reference to show cause notice issued dated 15/10/2024.

Whereas reply to the show cause notice has been submitted vide AA071 024036440T dated 07/11/2024; and whereas, the undersigned on examination of your reply to show cause notice and based on record available with this office is of the opinion that your registration is liable to be cancelled for following reason(s):

I. Others

Remarks:

At the time of physical verification, found existent at the give principle place of business, your reply is not considerable so your registration has been cancelled.

The effective date of cancellation of your registration is 15/10/2024.

2. Kindly refer to the supportive document(s) attached for cause specific details.

3. It may be noted that a registered person furnishing return under sub-section (I) of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR-10 within three months of the date of this order.

4. You are required to furnish all your pending returns.

5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this ACT (or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation.

The Company replied with rent agreements, returns, and proof of existence. The Authority replied with a shrug: "Your reply is not considerable."

Translation: " We asked for documents, but we don't read them ."

Lo and behold! The Company became non-existent and it could not do business as its registration stood cancelled.

In a recent judgement, the Allahabad High Court observed,

the order of cancellation of registration causes deep adverse impact on the conduct of business of any registered individual. Neither the petitioner shall remain entitled to issue Tax Invoices nor may be entitled to avail tax ITC or to pass on ITC. Under the GST regime, it announces the economic death of the business entity.

As can be seen from the adjudication order, in this case, there was no reason given as to why the registration was cancelled with effect from 15th October, 2024. Further, no reason was given in the order as to why the documents filed by the taxpayer were not considered, except stating that their reply is not considerable.

The Company then filed an application seeking revocation of the cancellation of the GST registration in respect of which again a further SCN dated 26th December, 2024 was issued which read as:

This has reference to your application dated 20/12/2024 regarding revocation of cancellation of registration. Your application has been examined and the same is liable to be rejected for the following reasons:

I. Reason for revocation of cancellation - Others (please specify) - The taxpayer didnt submit relevant documents like Bank KYC, ID-Address proof, copy of rent agreement/ownership proof, System generated reconciliation for GSTR-3B & GSTR-I; GSTR-3B and GSTR-2A, Details of invoices issued and copy of ledger during the period in which GSTN was cancelled; self declaration for payment of due tax within a month of revocation. Also, please deposit the tax liability in the cash ledger, if already calculated.

You are hereby directed to furnish a reply to the notice within seven working day . from the date of service of this notice.

If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.

In the SCN dated 26th December, 2024, seven days' time was given to the Company to file a reply, which was duly filed on 06th January, 2025 - albeit with a slight delay. In respect to these documents which were filed along with a detailed reply, there was no consideration and the revocation application was also dismissed on 8th January, 2025.

The Company then filed an appeal before the Appellate Authority, which was rejected by the Appellate Authority vide Order-in-Appeal dated 30th April, 2025 stating:

5.1 I find that the appellant, at appellate stage, has only submitted copies of lease deed dated 05.05.2024 & copy of electricity bill in the name of Bhim Singh. Except these documents, the appellant has not submitted any other document requisite through show cause notice dated 08.01.2025.

6. In view of the above, I do not find any fault in the impugned order as the appellant failed to submit the documents/information as were asked for vide show cause notice dated 08.01.2025. Most of the said documents/information have also not been submitted by the appellant at the appellate stage as well except copies of lease deed dated 05.05.2024 & copy of electricity bill in the name of Bhim Singh. As such, I hold that the said impugned order passed by the adjudicating authority is legal and maintainable in law and I do not find any reason to interfere with the said impugned order. Accordingly, I pass the following order:

ORDER

7. The appeal filed by M/s Imagine Marketing Limited, against Order-In-Original No. ZA07012503638L dated 08.01.2025 is hereby rejected and disposed of in terms of Section 107(12) of CGST Act, 2017 .

As usual in GST matters, the Company approached the Delhi High Court in writ petition challenging the Order for Cancellation of Registration dated 26th November, 2024 passed by the Superintendent and submitted that all the documents which were filed before the Adjudicating Authority were also placed before the Appellate Authority. But the same were not considered.

The High Court observed,

1. A perusal of the index of the appeal filed by the Petitioner reveals that copies of the screenshots, the replies, etc. were all filed and therefore, the Appellate Authority's order dated 30th April, 2025 is also completely erroneous.

2. The Adjudicating Authority's approach in this matter has been cavalier, to say the least.

3. The Adjudicating Authority has failed to consider any of the replies and the documents which were filed with the same and has passed mechanical, templated and computer generated orders without any application of mind.

4. All the orders are perverse, and show the negligent manner in which Superintendent, Range 56 has conducted himself.

5. An Adjudicating Authority has to show basic fairness, especially in the case of companies which are regular taxpayers and who have filed the replies in time along with the requisite documents.

6. Moreover, the GST returns etc. and forms thereof are all available on the GST Portal and repeatedly calling for the same from the taxpayer is not justified.

The High Court set aside the Appellate Authority's Order dated 30th April, 2025, the impugned order dated 26th November, 2024 and the order dated 08th January, 2025 rejecting revocation of the GST registration as these orders lack basic reasoning and do not show even fundamental fairness of adjudication .

The High Court restored the GST registration of the Petitioner and directed that

1. The SCN dated 15th October, 2024 shall now be adjudicated afresh.

2. A personal hearing shall be granted and

3. The notice for personal hearing shall be communicated.

The High Court provided the Mobile Number and E-mail id of the petitioner for the convenience of the learned adjudicating authority.

In the facts and circumstances of this case, the High Court imposed Rs. 25,000/- cost on the Department to be paid to the Petitioner which would be recoverable from the Superintendent.

Consider it the price of admission to the theatre where taxpayers vanish and justice reappears.

Crores invested, jobs created, taxes ready to flow - and then a Superintendent declares, "You don't exist." In GST's theatre of the absurd, existence is optional, cancellation compulsory.

The trick is simple: the taxpayer vanishes, but liability remains solid as ever.