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2024 (2) TMI 416 - HC - GSTCancellation of Registration of petitioner - the impugned order also does not disclose the grounds on which the authorities concerned were compelled to issue the cancellation of the registration - violation of principles of natural justice - HELD THAT - The impugned order dated 11.07.2022 and the rejection of the revocation of the order dated 26.12.2023 stands set aside/quashed. However, since the impugned orders have been passed without affording any opportunity of hearing to the petitioner, it is ordered that the impugned order dated 11.07.2022 itself be treated as a show cause notice and the petitioner may enter appearance before respondent No.1 and submit a detailed reply on or before 09.02.2024. The petitioner would also be at liberty to submit returns which they have not yet filed along with the late fees on application for delayed submission of returns so that the registration of the petitioner gets restored. Since the setting aside of the order dated 11.07.2022 would automatically restore the registration of the petitioner, it is made clear that if any Input Tax Credit (ITC) remains unutilized, the petitioner shall not be permitted to utilize the same till the finalization of the show cause proceedings. The Writ Petition stands allowed.
Issues Involved:
1. Validity of the Order for Cancellation of GST Registration. 2. Compliance with principles of natural justice. 3. Grounds for cancellation of GST registration. 4. Procedure for revocation of cancellation. Summary: 1. Validity of the Order for Cancellation of GST Registration: The petitioner challenged the Order for Cancellation of Registration dated 11.07.2022, which cancelled the GST registration effective from 11.06.2019. The impugned order lacked reasons necessitating the cancellation. The court observed that the order was passed without application of mind, as evidenced by the contradictory statements in the order itself. 2. Compliance with Principles of Natural Justice: The petitioner argued that they were not served with the show cause notice dated 07.06.2022, nor did they respond to it, contrary to the authority's claim. The court noted that the impugned order did not reference any reply from the petitioner, indicating a breach of natural justice principles. The court cited similar cases, including decisions from the High Courts of Delhi, Bombay, and Madras, emphasizing the need for a pragmatic approach and proper service of show cause notices. 3. Grounds for Cancellation of GST Registration: The Department's counsel contended that the cancellation was due to the petitioner's default in furnishing returns for over six months. However, the court found that the impugned order did not disclose any grounds for cancellation, making it liable for interference. The court referenced decisions where defective show cause notices and lack of reasons in cancellation orders were deemed illegal. 4. Procedure for Revocation of Cancellation: The court set aside the impugned order and the rejection of the revocation application, directing that the order dated 11.07.2022 be treated as a show cause notice. The petitioner was given the opportunity to submit a detailed reply and file pending returns with late fees by 09.02.2024. The court clarified that the setting aside of the order would automatically restore the petitioner's registration, but the petitioner could not utilize any unutilized Input Tax Credit until the finalization of the show cause proceedings. Conclusion: The writ petition was allowed, the impugned orders were quashed, and the matter was remitted back for fresh consideration, ensuring compliance with principles of natural justice and proper procedural adherence. The court emphasized the importance of detailed reasoning in orders affecting civil consequences.
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