2023 (11) TMI 517 - HC - GST

Cancellation of GST registration of petitioner - non-speaking order - requirement of valid SCN not fulfilled - violation of principles of natural justice - HELD THAT - It is found that the fundamental defects in the procedure adopted by the respondent- authority. In the first place the notice dated 4.8.2022 was wholly non speaking. No fact allegation was made in that notice as may have allowed the petitioner any opportunity to furnish reply thereto. Mere recital of the statutory requirement without specifying the facts, may not fulfill the requirement of the valid show-cause notice. It was not made known to petitioner that his registration was proposed to be cancelled for reason of doubt as to existence of principal place of business. The notice did not propose to grant real opportunity of hearing to the petitioner inasmuch as the issuing authority fixed the date for the proceeding on the next date itself. The bar of statutory alternative remedy of appeal is waived in the peculiar facts of the present case. In face of such excessive gross fundamental defects, it is not a fit case to consider the issue of delay at this stage as may delay the enforcement of rules of natural justice, in the peculiar facts of this case. Petition disposed off.

Summary

Issues involved:
The cancellation of registration under the Central Goods and Services Tax Act, 2017

Summary:

Challenge to Order:
The petitioner challenged the order cancelling their registration under the Central Goods and Services Tax Act, 2017, issued by the Superintendent, Sector-1, Range-4, CGST Commissionerate, Gautam Budh Nagar.

Preliminary Objection:
The respondent raised a preliminary objection regarding the maintainability of the writ petition, citing the petitioner's statutory alternative remedy of appeal. However, the objection was not sustained due to the specific facts of the case.

Cancellation Process:
The petitioner's registration was originally granted and later a show-cause notice was issued for cancellation, citing non-compliance with specified provisions. The registration was suspended, and despite the petitioner's contention of not receiving the notice, the registration was retrospectively cancelled for non-existence of the principal place of business.

Procedural Defects:
Fundamental defects in the procedure were identified, including the non-speaking nature of the initial notice, lack of a real opportunity for a hearing, failure to communicate a fresh hearing date, and the discrepancy between the reason for cancellation and the issues raised in the show-cause notice.

Judgment and Relief:
Given the procedural errors, the court waived the bar of statutory alternative remedy of appeal and directed the respondent to treat the impugned order as a show-cause notice. The petitioner was granted two weeks to respond, after which a proper hearing date should be fixed. The court emphasized the importance of natural justice and ordered that the rights of the parties would be determined based on the new order to be passed by the respondent.

Conclusion:
The writ petition was disposed of with no costs awarded, allowing the petitioner an opportunity to respond to the cancellation order under proper procedural safeguards.