2023 (10) TMI 1245 - HC - GST

Cancellation of Registration Certificate - SCN devoid of required particulars - 1st respondent has not referred and considered the explanation dated 06.07.2023 offered by the petitioner - violation of principles of natural justice - HELD THAT - The 1st respondent only mentioned that the registration was allegedly obtained by means of fraud, willful misstatement or suppression of facts. However, there are no other relevant requisite facts mentioned in the said allegation as to the manner how the petitioner committed fraud or willful misstatement or suppression of the facts relating to his obtaining registration. In the present form of allegation, it will be difficult for anybody including the petitioner to offer his explanation to the said allegation No. 1. As regards the allegation that, the person issued invoice or bill without supplying goods or services are both, in violation of the provisions of this Act and the rules made thereunder. Here also the said allegation is not clear enough to communicate whether the person means the petitioner herein or his vendors and particulars of fake invoices and bills. Therefore, this allegation is also as vague as it could be without giving an opportunity to the petitioner to submit his explanation in a proper manner. The 1st respondent, in issuing the show cause notice without necessary details and passing the final order of cancellation of Registration, not followed the principles of natural justice, and therefore, the show cause notice dated 12.06.2023 as well as the final order dated 03.08.2023 are liable to be set aside and are accordingly set aside - Petition disposed off.

Summary

Issues involved:
Challenging the cancellation of Registration Certificate based on a show cause notice alleging fraud, willful misstatement, and other violations of CGST/SGST Act.

Detailed Summary:

Issue 1: Show Cause Notice lacking particulars
The petitioner challenged the cancellation of their registration certificate based on a show cause notice lacking necessary details to provide a proper explanation. The notice alleged fraud, willful misstatement, and violations without specifying how these were committed, making it difficult for the petitioner to respond adequately.

Issue 2: Failure to consider petitioner's explanation
The petitioner submitted a detailed explanation in response to the show cause notice, but the final order of cancellation did not reference or consider this explanation. This failure to take into account the petitioner's response amounted to a violation of principles of natural justice.

Judgment:
Upon review, the court found that the show cause notice was indeed vague and lacked essential particulars for the petitioner to defend against the allegations. The court also noted that the final order did not address or acknowledge the petitioner's explanation, indicating a disregard for natural justice principles. As a result, the court set aside both the show cause notice and the final cancellation order, directing the authorities to reinstate the petitioner's registration within a week. The respondents were permitted to issue a fresh show cause notice with proper details and proceed lawfully. The writ petition was disposed of without costs, and any related pending applications were closed.