2023 (12) TMI 153 - HC - GST

Cancellation of petitioner s GST registration - registration obtained by means of fraud, wilful misstatement or suppression of facts - HELD THAT - It is apparent that the impugned order is void as it is not informed by reason. The impugned order does not either deal with the replies filed by the petitioner or set out any reason for cancelling the registration. It is also important to note that the petitioner s GST registration was cancelled with retrospective effect from 14.10.2017. The impugned SCN is also clearly unsustainable. Although it alleges that the petitioner had obtained the registration by means of fraud, wilful misstatement, or suppression of facts, it is apparent that the said reason has been selected from the pre-determined set of allegations. The impugned SCN does not mention the fraud alleged to have been perpetrated by the petitioner; does not disclose the wilful misstatement allegedly made by the petitioner or the facts which were suppressed. Thus, in effect, the impugned SCN does not set out the purpose of the show cause notice to enable the noticee to respond to the allegations. The impugned SCN fails to satisfy the said standards - The respondents are directed to restore the petitioner s GST registration forthwith. It is clarified that this order would not preclude the respondents from initiating any appropriate action, including for cancellation of the GST registration, in accordance with law. Petition allowed.

Summary

Issues involved:
The petition impugned a Show Cause Notice proposing to cancel GST registration and the subsequent order canceling the registration.

Impugned Show Cause Notice (SCN):
The petitioner challenged a Show Cause Notice (SCN) dated 26.07.2023, which proposed to cancel the GST registration based on Section 29(2)(e) for obtaining registration through fraud, wilful misstatement, or suppression of facts. The petitioner responded to the SCN within the stipulated time, providing details about its existence and operations.

Impugned Order Canceling Registration:
The GST registration was canceled by an order dated 25.08.2023 without providing any reasons, merely referencing the SCN. The cancellation was made effective from 14.10.2017, which was deemed void due to lack of reasoning and failure to address the petitioner's responses.

Judgment:
The High Court held that the impugned order and SCN were unsustainable. The order lacked reasons and failed to address the petitioner's submissions, rendering it void. The SCN did not specify the alleged fraud, wilful misstatement, or suppressed facts, failing to meet the necessary standards for a show cause notice.

Decision and Direction:
Consequently, the High Court set aside the impugned SCN and order, directing the authorities to restore the petitioner's GST registration immediately. The ruling clarified that this restoration did not prevent the authorities from taking appropriate legal actions as per the law. The petition was allowed, and all pending applications were disposed of accordingly.