2024 (1) TMI 234 - HC - GST

Cancellation of GST registration of petitioner - defective SCN - Non-specification of reason for proposing cancellation of the petitioner s GST registration - HELD THAT - A plain reading of the impugned SCN indicates that it is bereft of any specific reason for proposing cancellation of the petitioner s GST registration. It does not provide any particulars as to the alleged fraud committed by the petitioner. It also provides no clue as to the wilful misstatement made or the facts allegedly suppressed - It is settled law that the Show Cause Notice must clearly set out the reasons for proposing an adverse action. This is to enable the noticee to meet the said allegations. Clearly, the impugned SCN was incapable of eliciting any meaningful response in the absence of any specific allegation. There is merit in the petitioner s contention that the impugned SCN is liable to be set aside - Petition disposed off.

Summary

Issues involved:
The issues involved in the judgment are the challenge to the Show Cause Notice proposing cancellation of GST registration u/s 29(2)(e) and the suspension of GST registration.

Challenge to Show Cause Notice:
The petitioner filed a petition seeking to quash the Show Cause Notice dated 22.05.2023 proposing cancellation of GST registration u/s 29(2)(e) for fraud, wilful misstatement, or suppression of facts. The Court found the Notice lacking specificity as it did not provide any specific reason or particulars for the proposed cancellation. It was held that a meaningful response could not be elicited without clear allegations. Thus, the Court directed to set aside the impugned Show Cause Notice.

Suspension of GST Registration:
The petitioner's GST registration was suspended from the date of the impugned Show Cause Notice. The Court ordered the immediate lifting of the suspension and directed the respondents to take necessary steps for the same. It was clarified that while the respondents could proceed with cancellation in accordance with the law by issuing a proper Show Cause Notice and providing a reasonable opportunity to be heard, they were not precluded from recovering any due tax, penalty, or interest from the petitioner.

This judgment highlights the importance of providing specific reasons in a Show Cause Notice to enable the affected party to respond effectively. It emphasizes the need for procedural fairness in administrative actions related to tax matters.