2023 (11) TMI 872 - HC - GST

Cancellation of GST registration - blocking of ITC to all the customers of the petitioners - violation of fundamental right of doing business guaranteed under Article 19 (1) (g) of Constitution of India - no discrepancy in the claim of the input tax raised by the petitioners for the Financial Year 2017-2018 and 2021- 2022 - HELD THAT - This Court is not going into the allegations as mentioned in Ext.P1 show cause notice. However, as the show cause notice has been issued and the petitioners have responded to the said show cause notice, the second respondent is directed to conclude the adjudication of Ext.P1 show cause notice issued to the petitioners expeditiously, in accordance with law and petitioners should be afforded opportunity for giving evidence in support of their claim. The second respondent should make endeavour to finalise the adjudication proceedings of Ext. P1 show cause notice expeditiously, preferably, within a period of two months and communicate the orders to the petitioners. The writ petition is finally disposed of.

Summary

Issues Involved:
The issues involved in the judgment are related to GST registration cancellation orders, blocking of input tax credit, violation of fundamental right of doing business, issuance of show cause notice, and adjudication process.

GST Registration Cancellation Orders:
The petitioners sought relief from the court to quash the registration cancellation orders and block on input tax credit issued by the third respondent. The petitioners were accused of obtaining GST registration and issuing invoices without actual supply of goods or services. A show cause notice was issued to the petitioners, and they responded with a detailed reply. However, the registration of the petitioners was cancelled before a decision was made on the show cause notice. The petitioners claimed to be genuine traders and requested a fair adjudication process.

Violation of Fundamental Right:
The petitioners argued that the cancellation of their GST registration and blocking of input tax credit violated their fundamental right of doing business guaranteed under Article 19(1)(g) of the Constitution of India. They requested the court to issue a writ of certiorari to quash the registration cancellation orders and a writ of mandamus to direct the respondents not to proceed further until a final decision was made after a personal hearing.

Adjudication Process:
The court directed the adjudicating authority to conclude the adjudication of the show cause notice issued to the petitioners expeditiously and in accordance with the law. The petitioners were granted the opportunity to produce evidence in support of their claim regarding the genuineness of their GST registration and business activities. The court emphasized the need for a time-bound adjudication process, preferably within two months, and for the communication of orders to the petitioners.

Conclusion:
The High Court of Kerala disposed of the writ petition with directions for the adjudication of the show cause notice in a fair and time-bound manner. The court did not delve into the specific allegations but focused on ensuring a proper adjudication process for the petitioners. The judgment aimed to uphold the principles of natural justice and provide the petitioners with an opportunity to defend their case effectively.