2023 (9) TMI 1184 - HC - GST

Petitioner s application for revocation of the cancellation of his GST registration, was rejected - SCN did not provide any clue as to the reason for proposing cancellation of the petitioner s GST registration - violation of principles of natural justice - HELD THAT - This Court has in a number of decisions, held that such show cause notices, which do not specifically state the reason for proposing adverse actions cannot be sustained. The purpose of the show cause notice is to enable the noticee to respond to the allegations. Since the said show cause notice is incapable of eliciting any meaningful response, it does not meet the standards required for a show cause notice. Any order passed pursuant to such a show cause notice would fall foul of the principles of natural justice. The reasons for proposing to reject the petitioner s application are vague and unintelligible. This Court is at loss to understand the reason for proposing to reject the petitioner s application as articulated by the Proper Officer. The impugned order dated 23.05.2023 is equally cryptic and vague. It is evident from the reasons for rejection of the petitioner s appeal as stated in the impugned order dated 23.05.2023, that the said order has been passed without application of mind. The impugned show notice dated 5.12.2021 fails to disclose the reason for proposing cancellation of the petitioner s GST registration and therefore, the impugned order cancelling the petitioner s registration falls foul of the principles of natural justice. It is accordingly set aside - Petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the rejection of the petitioner's application for revocation of the cancellation of GST registration, inadequacy of show cause notices, lack of specific reasons for adverse actions, and failure to consider the petitioner's submissions.

Impugned Order and Background:
The petitioner challenged an order rejecting the revocation of GST registration cancellation. The initial show cause notice lacked specific reasons for cancellation, leading to a cancellation order dated 03.01.2022. The petitioner's subsequent application for revocation was rejected on vague grounds, including failure to reply within the specified time.

Inadequate Show Cause Notice:
The High Court noted that the show cause notice dated 05.12.2021 did not specify the reason for proposing cancellation of GST registration. This lack of clarity rendered the notice insufficient for the petitioner to respond effectively, violating principles of natural justice.

Cancellation of Registration:
The Proper Officer canceled the petitioner's GST registration on the basis of not uploading bank details, with retrospective effect from 06.02.2020. However, the petitioner claimed to have uploaded bank details on the GST portal since the date of registration, providing evidence to support this claim.

Rejection of Revocation Application:
The rejection of the petitioner's application for revocation of cancellation was based on vague and unintelligible reasons. The impugned order failed to consider the petitioner's submissions regarding the bank details uploaded on the GST portal, leading to a dismissal without proper examination.

Judicial Decision:
The High Court set aside the impugned orders and the cancellation of the petitioner's registration. It criticized the lack of clarity in the show cause notices and the failure to consider the petitioner's evidence. The court allowed the petition with costs of Rs. 5,000 to be paid to the petitioner within two weeks.

Conclusion:
The judgment highlighted the importance of providing clear and specific reasons in show cause notices for adverse actions such as cancellation of GST registration. It emphasized the need for authorities to consider and address the submissions made by the affected parties before making decisions, ensuring fairness and adherence to principles of natural justice.