2023 (8) TMI 735 - HC - GST

Cancellation of GST registration of petitioner - impugned show-cause notice did not disclose any other reason or particulars for proposing the adverse action against the petitioner - suppression of facts or not - violation of principles of natural justice - HELD THAT - The impugned show-cause notice was bereft of any particulars and it is difficult to accept that the said show-cause notice could elicit any meaningful response. It is trite law that a show-cause notice must set out the allegation in order to enable the noticee to respond to the same. Merely making the bald statement that the registration was obtained by fraud, willful misstatement or suppression of facts without alluding to any such misstatement or the allegedly suppressed facts, provides no clue to the noticee as to the allegation against him. Although the impugned order is an appealable order, but considering that this is a clear case of violation of the principles of natural justice, it is considered apposite to entertain the present petition - petition allowed.

Summary

Issues involved:
The issues involved in this case are the validity of the show-cause notice calling for registration cancellation and the subsequent order passed by the respondent, as well as the lack of specific reasons provided for the adverse action against the petitioner.

Impugned Show-Cause Notice:
The petitioner challenged a show-cause notice dated 09.05.2023, which called for the petitioner's registration cancellation under Section 29(2)(e) for allegedly obtaining registration by means of fraud, willful misstatement, or suppression of facts. The notice lacked specific details or particulars regarding the allegations, making it difficult for the petitioner to respond effectively within the given timeframe.

Response to Show-Cause Notice:
The petitioner responded belatedly to the show-cause notice, questioning the basis for fraud in the transactions and highlighting the lack of clarity in the allegations. The Court emphasized that a show-cause notice must provide sufficient details to enable the noticee to respond adequately, which was lacking in this case. The Court found the notice to be insufficient and unable to elicit a meaningful response.

Impugned Order for Registration Cancellation:
The impugned order dated 29.05.2023 canceled the petitioner's GST registration, citing the show-cause notice issued earlier. However, the order was criticized for its lack of clarity and reasons for the cancellation. The order did not provide specific grounds or explanations for the retrospective cancellation of registration, which raised concerns regarding natural justice principles being violated.

Judgment and Decision:
The Court set aside both the impugned show-cause notice and the order for registration cancellation, noting that they were deficient in providing clear reasons and details for the adverse action against the petitioner. Despite the appealable nature of the order, the Court intervened due to the violation of principles of natural justice. Consequently, the petition was allowed, and the impugned notice and order were declared invalid and set aside.