2021 (2) TMI 702 - HC - GST

Cancellation of the Goods and Service Tax (GST) registration of the petitioner - Applicability of provisions of Section 29(2) and rule 21A of the Central Goods and Service Tax Act, 2017 - correctness of suspension of registration under the second proviso to Section 29(2) of the CGST Act - HELD THAT - It appears from the record that the petitioner has already challenged show cause notice for cancellation of registration dated 2nd December, 2020 by filing reply thereto. This part has to be adjudicated by the concerned authority empowered under the statute in accordance with law. This Court, therefor, does not wish to enter the domain of the authority and leaves all points in respect thereof open. So far as the personal hearing part before suspension is concerned the same is a statutory requirement which having not been complied with, the suspension part as indicated in the show cause notice for cancellation dated 2nd December, 2020 is bad in law and is set aside. The authority concerned is directed to give a personal hearing to the petitioner in terms of Section 29(2) of the CGST Act for the purpose of adjudicating the cancellation issue in terms of show cause notice for cancellation dated 2nd December, 2020. The entire exercise shall be completed within a period of three weeks from date. The authority concerned shall issue a specific notice informing the petitioner about the date and time of hearing well in advance and the petitioner co-operate in the hearing. The concerned officer upon hearing the petitioner shall pass a reasoned order and will be free to pass appropriate orders, if the petitioner does not participate at the hearing. Petition disposed off.

Summary

Issues:
Challenge to show cause notice for cancellation of GST registration, Lack of personal hearing before suspension, Validity of notices issued, Compliance with statutory requirements, Direction for personal hearing, Disposal of writ petition.

Analysis:
The petitioner challenged a show cause notice dated 2nd December, 2020, for the cancellation of Goods and Service Tax (GST) registration, issued without a personal hearing before the suspension. The petitioner contended that the notice contravened Section 29(2) and rule 21A of the Central Goods and Service Tax Act, 2017 (CGST Act). The respondent admitted the requirement of a hearing before suspension under rule 21A but argued that Section 29 pertained to cancellation, not suspension. The court noted the amendment to rule 21A post the issuance of the notice, emphasizing the necessity of a hearing before suspension under the unamended rule.

The court refrained from delving into the cancellation issue, as it should be adjudicated by the appropriate authority. However, regarding the lack of a personal hearing before suspension, the court deemed the suspension invalid due to non-compliance with the statutory requirement. Consequently, the suspension part of the show cause notice was set aside, and the authority was directed to provide a personal hearing to the petitioner within three weeks, in line with Section 29(2) of the CGST Act. The court instructed the authority to notify the petitioner of the hearing details in advance, with the petitioner's cooperation expected. The authority was empowered to issue a reasoned order if the petitioner failed to participate in the hearing.

As no further issues required adjudication in the writ petition, it was disposed of. The court clarified that since no affidavits were requested, the allegations in the petition were not deemed admitted by the respondents. The judgment highlighted the importance of procedural fairness and adherence to statutory requirements in matters concerning GST registration and suspension, ensuring due process and opportunity for a hearing before adverse actions.