2023 (11) TMI 712 - HC - GST

Cancellation of GST registration of petitioner - existence of statutory alternative remedy - HELD THAT - From a bare reading of the notice, reply furnished thereto and the impugned order it transpires, in the first place a wholly non-speaking show- cause notice was issued to the petitioner. Besides making reference to the statutory requirement/ obligation on a registered person to issue a tax invoice only against actual business transaction, no fact allegation was made in that notice of any violation/ infringement of that statutory requirement, committed by the petitioner. Neither date or detail of the tax invoice nor goods involved nor their value etc. nor the purchaser were disclosed. Even the period during which the law may have been allegedly infringed by the petitioner, was not specified in the show-cause notice. At the same time, the said communication suspended the registration of the petitioner. Though the petitioner's reply dated 28.3.2023 may also be described as vague at the same time it is difficult to accept that an adverse conclusion may have been drawn against the petitioner solely on that basis. Unless the show-cause notice had made any fact allegation against the petitioner, the vagueness of the reply may remain inconsequential. The order impugned dated 9.8.2023 assigns no reason whatsoever to cancel the petitioner's registration - Relegating the petitioner to the forum of alternative remedy in face of undisputed facts noted above may be of no real use or purpose. The writ court regularly relegates petitioners specifically in tax matters, to the forum of the statutory remedy of appeal where minimum compliances of law have been made - the objection of the maintainability of the present writ petition is over ruled. The petition is disposed off.

Summary

Issues involved:
The judgment deals with the cancellation of registration under the Central Goods and Services Tax Act, 2017 and the existence of a statutory alternative remedy.

Cancellation of Registration:
The petitioner's registration was cancelled by the Superintendent, CGST Range14, Division IIIrd, Ghaziabad through an order dated 9.8.2023. The cancellation order was issued without providing any reasons for the cancellation, which is a serious matter as it directly impacts a business entity by causing closure of business operations. The order failed to specify any violation committed by the petitioner and did not mention any details of the alleged infringement. The show-cause notice issued to the petitioner was found to be non-speaking as it did not contain any specific allegations or details regarding the alleged violation. The reply submitted by the petitioner in response to the notice was considered vague, but it was noted that without specific allegations in the show-cause notice, the vagueness of the reply may not be consequential.

Statutory Alternative Remedy:
The respondent raised a preliminary objection regarding the existence of a statutory alternative remedy. While it was acknowledged that such a remedy exists, it was found to be wholly inadequate in the peculiar facts of the case. The judgment highlighted that in cases where there is a lack of jurisdiction or a violation of the principle of natural justice, the court may intervene to ensure adherence to the rule of law by both the assessee and the revenue authority. In this specific case, the court overruled the objection of the maintainability of the writ petition and disposed of the petition with a direction for the suspension of the petitioner's registration to remain in force for one month. Additionally, the respondent was directed to issue a fresh show-cause notice to the petitioner within a week, and upon receiving a reply, to pass an appropriate reasoned order within one week.

Conclusion:
The judgment emphasized the importance of providing specific reasons for the cancellation of registration and ensuring due process in such matters. It highlighted the impact of cancellation on business operations and the need for proper adherence to legal procedures. The court's decision to allow the petitioner to respond to a fresh show-cause notice reflects the importance of procedural fairness and the rule of law in tax matters.