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2023 (2) TMI 935 - HC - GST


Issues Involved:
1. Cancellation of GST Registration.
2. Rejection of Application for Revocation of Cancellation.
3. Procedural Lapses and Natural Justice.
4. Technical Glitches in GST Portal.
5. Adequate Opportunity for Representation.

Detailed Analysis:

1. Cancellation of GST Registration:
The petitioner, a proprietary concern dealing in scrap, had its GST registration canceled by the respondent authority on 26.07.2019. The cancellation was based on allegations of fraud, willful mistake, and suppression of facts. However, the petitioner contended that no physical notice was received, and the cancellation order lacked specific reasons.

2. Rejection of Application for Revocation of Cancellation:
The petitioner applied for revocation of the cancellation on 01.08.2019, but the application was not acted upon for a significant period. Despite multiple requests and a court order directing the respondent to process the application, the respondent rejected the revocation request on 05.01.2022 without issuing a show-cause notice. The rejection cited involvement in bogus billing, which was not part of the initial show-cause notice.

3. Procedural Lapses and Natural Justice:
The court found that the respondent failed to follow due procedure as prescribed under the GST Act and rules. The show-cause notice issued was cryptic and lacked specific details, violating principles of natural justice. The court emphasized that reasons are the "heart and soul" of an order, and non-communication of reasons amounts to denial of reasonable opportunity, resulting in miscarriage of justice.

4. Technical Glitches in GST Portal:
The respondent argued that technical glitches in the GST portal prevented them from issuing detailed show-cause notices and final orders. The court rejected this explanation, directing that until technical issues are resolved, notices and orders should be issued in physical form with all necessary details and sent via RPAD.

5. Adequate Opportunity for Representation:
The court highlighted that the petitioner was not given adequate opportunity to respond to the allegations. The court referenced previous judgments emphasizing the necessity of providing reasons and adhering to principles of natural justice. The court also noted that the appellate authority had mechanically dismissed appeals on the ground of delay without considering the peculiar circumstances, including the onset of the COVID-19 pandemic.

Conclusion:
The court quashed the show-cause notices and cancellation orders, directing the respondent to issue fresh notices with detailed reasons and provide the petitioner an opportunity to respond. The court's decision underscored the importance of procedural fairness and the need for the GST portal to function effectively to prevent unnecessary litigation.

Separate Judgment by Judges:
The judgment was delivered by Honourable the Chief Justice Ms. Justice Sonia Gokani, with Honourable Mr. Justice Sandeep N. Bhatt concurring.

 

 

 

 

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