2024 (2) TMI 475 - HC - GST

Cancellation of registration passed by the respondent-authorities - no detailed reasons for cancellation of registration number of the petitioners except one line reason - opportunity to file reply as well as hearing - Violation of Principles of natural justice - HELD THAT - After receipt of the reply from the petitioners, the respondent-authorities shall pass appropriate order in accordance with law in exercise of powers under section 108 of the GST Act after giving opportunity of hearing to the petitioners and considering the reply to be filed by the petitioners within a period of four weeks from the date of hearing. Without entering into the merits of the matter, these petitions stand disposed of at this stage with a liberty to revive in case of difficulty with a hope that the aforesaid schedule proposed by the respondent authorities shall be adhered to.

Summary

Issues Involved:
1. Challenge to the order of cancellation of registration.
2. Compliance with principles of natural justice.
3. Implementation of procedural guidelines by the respondent-authorities.

Summary:

1. Challenge to the order of cancellation of registration:
The petitioners challenged the order of cancellation of registration passed by the respondent-authorities, arguing that such orders did not contain detailed reasons for cancellation except for a one-line reason.

2. Compliance with principles of natural justice:
The court referenced the Co-ordinate Bench's judgment in the case of M/s. Aggrawal Dyeing & Printing vs. State of Gujarat, which emphasized that show cause notices and final orders must contain all necessary details and information and be forwarded to the dealer by RPAD. The court noted that many impugned orders cancelling registration of dealers often travel beyond the scope of the show cause notice, taking dealers by surprise. The judgment stressed the importance of procedural diligence to avoid unnecessary litigation and ensure compliance with principles of natural justice.

3. Implementation of procedural guidelines by the respondent-authorities:
Despite the 2022 judgment directing proper issuance of notices and orders, the respondent-authorities continued to issue cryptic notices and orders. Following oral directions from the court, senior tax officials were present in court and acknowledged the need to implement the Aggrawal Dyeing & Printing decision. An affidavit-in-reply detailed steps taken, including instructions issued on 15.07.2022 and a detailed SOP on 01.04.2023, mandating that show cause notices and final orders contain all relevant details and documents. The affidavit also mentioned disciplinary actions against non-compliant officers and the initiation of suo-moto revision proceedings u/s 108 of the GST Act for improperly issued cancellation orders.

Court's Order:
The court directed the respondent-authorities to issue revision notices within two weeks, allowing petitioners to file replies and receive hearings. The authorities must provide reasons for cancellation if not previously supplied. The petitions were disposed of with liberty to revive in case of difficulty, emphasizing adherence to the proposed schedule and cooperation from the petitioners.

Direct service is permitted.