2022 (10) TMI 1001 - HC - GST

Cancellation of registration of petitioner - whether no reason has been provided in the show cause notice as to why the proceeding for cancellation of registration under the CGST Act is sought to be initiated against the petitioner? - section 129 of CGST Act - violation of principles of natural justice - HELD THAT - The show cause notice suspending the GST registration of the petitioner w.e.f. 18.08.2022 is due to the proceedings initiated against the petitioner under the GST Act for violation of the provisions in issuing invoice or bill without supply of goods wrongful availment of the benefits under the Act. The petitioner should furnish a proper reply to the show cause notice dated 18.08.2022 making out a case as to why action cannot be taken against him. As the petitioner has approached this Court without furnishing any reply to the show cause notice, this is not a fit case for interference. Petition disposed off.

Summary

Issues:
Petition challenging show cause notice for cancellation of registration under CGST Act lacking material details for proper response.

Analysis:
The petitioner challenged a show cause notice dated 18.08.2022 calling for an explanation as to why registration cancellation proceedings should not be initiated against him under the CGST Act. The petitioner argued that the notice did not provide any reasons or material details, hindering the ability to respond adequately. Citing the decision in Commissioner of Central Excise vs. Brindavan Beverages, it was contended that a show cause notice must include foundational facts, supporting material, allegations of law violation, and an opportunity to respond. Without these, the notice becomes a mere formality, impeding the petitioner's ability to reply effectively.

The respondent's counsel highlighted an order initiating proceedings under Section 129(1)(b) of the CGST Act, imposing penalties on the petitioner. The show cause notice in question stemmed from these proceedings, alleging violations related to invoicing without actual supply of goods/services and wrongful input tax credit utilization. The petitioner had appealed the penalty order under Section 107 of the CGST/UPGST Act, contesting the penalties before the First Appellate Authority.

Upon review, the court found that the show cause notice suspending the petitioner's GST registration was a result of the ongoing proceedings under the GST Act for violations related to invoicing and tax credit issues. The court opined that the petitioner should respond to the notice adequately to present reasons why action should not be taken. Since the petitioner had not yet replied to the notice, the court declined to interfere at that stage. However, the court directed the petitioner to submit a reply to the show cause notice within two weeks, along with a certified copy of the court's order, for the competent authority to consider and decide in accordance with the law.

In conclusion, the writ petition was disposed of with the observation that the petitioner should furnish a proper reply to the show cause notice to address the allegations and objections raised, allowing the competent authority to make a decision based on the presented arguments and legal provisions.