2023 (10) TMI 415 - HC - GST

Cancellation of GST registration of petitioner - specific reason for cancellation not provided in the SCN - HELD THAT - As is apparent, the SCN did not set out any specific reason or allegation on the basis of which the proper officer proposed to cancel the petitioner s registration. Although, it is alleged in the SCN that the registration has been obtained by means of fraud, wilful misstatement or suppression of facts, it does not provide any clue as to the alleged fraud committed by the petitioner; the alleged wilful misstatement made by him; or the material facts allegedly suppressed by him. It is well-settled that a show-cause notice must clearly state the reasons for proposing any adverse action to enable the noticee to respond to the same. The SCN was incapable of eliciting any meaningful response as it provided no intelligible reasons for proposing cancellation of the petitioner s GST registration - the petitioner s GST registration was cancelled on account of a letter received from the Anti-Evasion Branch and for the reasons that No Objection Certificate had not been received from the said Branch. The order dated 15.11.2022 is thus void as having been passed in violation of the principles of natural justice - the SCN is also not sustainable for the reason that it fails to meet the necessary standards required of a show-cause notice. The order cancelling the petitioner s GST registration cannot be sustained. The SCN as well as the order dated 15.11.2022 cancelling the petitioner s GST registration, are set aside - respondent is forthwith directed to restore the petitioner s GST registration - Petition allowed.

Summary

Issues involved:
The issues involved in the judgment are the impugning of a Show-Cause Notice (SCN) calling for the cancellation of GST registration, the subsequent cancellation order, the application for revocation of the cancellation, and the failure to decide on the revocation application.

Impugning the Show-Cause Notice and Cancellation Order:
The petitioner challenged a Show-Cause Notice (SCN) dated 20.04.2022, calling for the cancellation of GST registration, and an order dated 15.11.2022, cancelling the registration. The SCN failed to provide specific reasons for the proposed cancellation, rendering it incapable of eliciting a meaningful response. The cancellation order, based on reasons not mentioned in the SCN, was deemed void for violating principles of natural justice.

Application for Revocation and Failure to Decide:
The petitioner filed an application for revocation of the cancellation order, but it had not been decided. Subsequently, a Show-Cause Notice dated 16.12.2022 was issued, proposing to reject the revocation application on the grounds of failure to join an investigation by the Anti-Evasion Branch. The petitioner responded, refuting the allegation and stating compliance with the investigation, but no decision was made on the application even after ten months.

Judgment:
The High Court set aside the SCN and the cancellation order, directing the restoration of the petitioner's GST registration. It was clarified that the restoration did not prevent the respondent from initiating fresh proceedings for cancellation if justified by law. The petition was allowed in the mentioned terms.