2024 (1) TMI 1202 - HC - GST

Cancellation of petitioner s GST registration - fraudulent purchase - impugned order does not disclose any reason for cancelling the petitioner s GST registration - violation of principles of natural justice - HELD THAT - Undisputedly, the impugned Show Cause Notice fails to meet the requisite standard for such notice - It is also material to note that although the impugned show cause notice required the petitioner to appear for personal hearing on the appointed date and time and also cautioned that if the petitioner failed to do so, the case would be decided ex parte, but the notice does not specify any date or time at which the such personal hearing was scheduled - the petitioner had no opportunity to be heard. The impugned order passed pursuant to the impugned show cause notice, is also liable to be set aside on the ground that it had been passed in violation of principles of natural justice - the impugned show cause notice dated 29.10.2021 and the impugned order dated 16.12.2021 are set aside. The petitioner s GST registration is directed to be restored forthwith - Petition disposed off.

Summary

Issues:
The judgment involves the cancellation of GST registration based on a show cause notice and subsequent order lacking reasons and violating principles of natural justice.

Cancellation of GST Registration:
The petitioner challenged the show cause notice proposing the cancellation of GST registration, citing a letter regarding fraudulent purchase from DGGI. The petitioner's registration was suspended from the date of the notice and later cancelled with retrospective effect from 01.07.2017. However, the order did not provide any reasons for the cancellation, leaving the space blank and failing to disclose details of the alleged fraudulent purchase. The notice did not specify a date or time for the personal hearing, depriving the petitioner of an opportunity to be heard. The court found the show cause notice deficient as it did not clearly set out the allegations, and the order was passed in violation of principles of natural justice.

Lack of Reasons in the Order:
The impugned order cancelling the GST registration was found to be deficient as it did not contain any reasons for the cancellation. Despite the retrospective effect of the cancellation, neither the show cause notice nor the order provided any explanation for this decision. The court held that the order lacked justification and failed to inform the petitioner of the grounds for cancelling the registration.

Setting Aside the Impugned Notice and Order:
In light of the deficiencies in the show cause notice and the order, the court set aside both the notice dated 29.10.2021 and the order dated 16.12.2021. The petitioner's GST registration was directed to be restored immediately. The judgment clarified that this restoration did not prevent the respondent from initiating fresh proceedings against the petitioner in accordance with the law. Additionally, all GST Central authorities were instructed to ensure compliance with the court's order. The petition was disposed of in the aforementioned terms, providing relief to the petitioner and emphasizing the importance of procedural fairness in such matters.