2023 (9) TMI 1001 - HC - GST

Cancellation of GST registration of petitioner - registration obtained by means of fraud or not - SCN did not provide any specific reason as to the alleged fraud and it did not provide any clue as to the facts which were allegedly suppressed - HELD THAT - It is evident that the petitioner had no clue as to why its GST registration was sought to be cancelled. The petitioner s request for providing further specific grounds was not acceded to and no further information was provided to the petitioner. The impugned order does not mention any reason whatsoever for the cancellation of the petitioner s GST registration. It merely states that it is an order for cancellation of registration and is in reference to the show cause notice dated 16.05.2023. It further states that the effective date of the cancellation of the GST registration is 04.05.2018 - this Court has, in a number of decisions, held that such show cause notices and orders which are not informed by any reasons cannot be sustained, however, tax payers continue to be vexed by such show cause notices and orders that provide no reason, whatsoever. Petition allowed albeit with the cost of ₹5,000/-.

Summary

Issues involved: Impugning an order cancelling GST registration based on a show cause notice alleging fraud, wilful misstatement, or suppression of facts without specific reasons provided.

Summary:

Issue 1: Lack of specific reasons in show cause notice
The petitioner challenged an order cancelling their GST registration, which was based on a show cause notice alleging fraud, wilful misstatement, or suppression of facts without specifying the grounds. The notice did not provide any specific details regarding the alleged misconduct, leaving the petitioner without clarity on the basis of cancellation.

Issue 2: Petitioner's response and lack of information
In response to the show cause notice, the petitioner denied the allegations and requested specific grounds for the cancellation, in order to prepare a detailed defense. However, the petitioner's request for further information was not granted, and they remained unaware of the reasons behind the cancellation of their GST registration.

Issue 3: Lack of reasoning in the impugned order
The impugned order cancelling the petitioner's GST registration did not provide any reasons for the cancellation, simply referring to the show cause notice without elaborating on the basis for the decision. The order only mentioned the effective date of cancellation without any explanation, leading to ambiguity and lack of transparency in the process.

Conclusion
The High Court, noting the absence of reasons in both the show cause notice and the impugned order, allowed the petitioner's petition, imposing a cost of Rs. 5,000 to be paid within two weeks. The Court emphasized the importance of providing clear reasons in such notices and orders to ensure transparency and fairness for taxpayers, disposing of all pending applications in the matter.