2024 (2) TMI 1007 - HC - GST

Cancellation of GST registration of the petitioner - petitioner was not provided proper opportunity of being heard - violation of principles of natural justice - HELD THAT - From the show cause notice, it appears that the proposed cancellation was on the basis of a report from the State Tax Officer, Investigation Survey Unit-I, Erode Division to the effect that the petitioner was not carrying on business activities at the registered place of business. The impugned order records that the petitioner did not appear in person or through an authorised representative upon receipt of the show cause notice. It also records that the petitioner did not reply to the show cause notice. Thus, the statement recorded in the impugned order of cancellation is not in consonance with the submission of learned Government Advocate on instructions. The record reveals that the petitioner was not heard before the impugned order of cancellation was issued. The petitioner should be provided an opportunity to contest the cancellation of registration. Solely for this reason, the impugned order of cancellation is interfered with by quashing the same - the matter is remanded to the first respondent for re-consideration, and the petitioner is permitted to file a reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

Summary

Issues involved:
- Cancellation of GST registration without proper opportunity for the petitioner to contest the decision.
- Lack of communication of crucial documents and discrepancies in the authority issuing the show cause notice and the cancellation order.
- Need for providing a fair opportunity to the petitioner to contest the cancellation of registration.

The petitioner challenged the cancellation of their GST registration, stating unawareness of the show cause notice and lack of opportunity to respond. The petitioner, a registered person under GST laws, received an intimation regarding assessment but was surprised by the cancellation order. The petitioner's counsel argued that crucial documents were not provided, and there were discrepancies in the issuing authorities of the show cause notice and cancellation order.

The Government Advocate contended that the petitioner had participated in the proceedings after receiving the show cause notice, limiting their right to question the Assistant Commissioner's jurisdiction. He emphasized the distinction between proceedings related to the intimation and those concerning registration cancellation. The Advocate also highlighted Section 160(2) of the Tamil Nadu Goods and Services Tax Act, 2017, to support the respondent's position.

The basis for the proposed cancellation was a report indicating non-business activities at the registered place. The cancellation order stated the petitioner did not respond to the show cause notice or appear before the authorities. However, the court noted discrepancies in the records and concluded that the petitioner should have the opportunity to contest the cancellation. Consequently, the court quashed the cancellation order and remanded the matter for reconsideration.

The court directed the respondent to allow the petitioner to file a reply to the show cause notice within two weeks and provide a reasonable opportunity for a personal hearing. A fresh order was to be issued within one month from receiving the petitioner's reply, with a clarification that the petitioner would not benefit from registration in the meantime. The case was disposed of with no costs, and related motions were closed.