2023 (4) TMI 1125 - HC - GST

Setting aside show-cause notice for cancellation registration in Form GST REG-31 - HELD THAT - There is no gainsaying that the notice since is issued for cancelling the GST registration of the petitioner, if the final order against the petitioner is to be adverse, it will operate to the detriment and prejudice to the petitioner. Therefore, the process of adjudication post issuance of show-cause notice would necessitate observance of natural justice and providing reasonable opportunity to the petitioner to defend his case and submit appropriate facts and details in relation to the show-cause notice. Before proceeding further pursuant to the show-cause notice, the petitioner shall be given four weeks time to file reply and also shall be given personal hearing for which the date shall be intimated to the petitioner - After filing the reply and personal hearing is given, the authority shall decide the issue of cancellation of GST registration. Petition disposed off.

Summary

Issues involved:
The issues involved in the judgment are the challenge to the vires of subrule (2) and (2A) of Rule 21A of CGST/GGST Rules, 2017 and the nature and consequences of the impugned notice for cancellation of GST registration.

Challenge to Vires of Rule:
The petitioner initially sought an appropriate writ/order/direction challenging the vires of subrule (2) and (2A) of Rule 21A of CGST/GGST Rules, but later gave up this prayer. Consequently, the only prayer remaining was to set aside the show-cause notice dated 06.12.2022 for cancellation of registration in Form GST REG-31.

Nature of Impugned Notice:
The petitioner, a proprietary firm engaged in the supply of carbonates sodium hydroxide, received a notice from the Commissioner of State Tax, Ahmedabad, stating that its registration was liable to be cancelled due to issues with returns filed under section 39 of the Central Goods and Services Tax Act, 2017. With the challenge to the vires of the Rule abandoned, the focus of the petition shifted to the nature and consequences of the cancellation notice.

Court Directions:
The Court emphasized the importance of natural justice in the adjudication process following the issuance of a show-cause notice for cancellation of GST registration. It directed that the petitioner be given four weeks to file a reply and a personal hearing, with the authority required to make a decision within four weeks thereafter. Notably, the Court refrained from delving into the merits of either party's arguments, instead focusing on ensuring due process in the proceedings.

Disposition:
The petition was disposed of with the aforementioned directions in place, emphasizing the need for fair adjudication and providing the petitioner with an opportunity to present their case effectively before a decision on the cancellation of GST registration is made.