2024 (4) TMI 319 - HC - GST

Cancellation of GST registration - documents are vitiated by lack of clarity and non-application of mind - violation of principles of natural justice - HELD THAT - The show cause notice does not indicate as to which provisions of the applicable GST statutes were not complied with by the petitioner. In those circumstances, as correctly pointed out by the petitioner in reply dated 09.02.2023, it was not possible for the petitioner to show cause in response. The order of cancellation also contains no reasons except for the contradictory statements referring to the reply dated 09.02.2023 and thereafter stating that no reply was submitted. Therefore, the impugned order of cancellation is unsustainable. The impugned order of cancellation is quashed and, as a corollary, the first respondent is directed to restore the registration of the petitioner forthwith. It is made clear that it is open to the respondents to initiate proceedings, including for cancellation of registration, in case of non-compliance, in accordance with law. Petition allowed.

Summary

Issues involved: Challenge to order of cancellation of GST registration due to lack of clarity and non-application of mind in the show cause notice and cancellation order.

Summary:
The petitioner challenged an order of cancellation of GST registration, claiming lack of clarity in the show cause notice and the impugned cancellation order. The show cause notice dated 29.12.2022 alleged non-compliance without specifying the provisions. The petitioner replied on 09.02.2023, highlighting the lack of specificity in the notice. The impugned cancellation order was issued on 17.02.2023. The petitioner argued that both the show cause notice and the cancellation order lacked clarity and proper application of mind, leading to the cancellation being unsustainable.

The show cause notice failed to specify the provisions of the GST statutes that were allegedly not complied with by the petitioner, making it impossible for the petitioner to respond adequately. The cancellation order did not provide reasons for the cancellation, leading to contradictory statements about the petitioner's reply. The Court found the cancellation order unsustainable due to the lack of clarity and non-application of mind in both the show cause notice and the cancellation order.

The Court quashed the impugned cancellation order and directed the restoration of the petitioner's registration. It was clarified that the respondents could initiate proceedings for cancellation of registration in case of non-compliance following proper legal procedures. The writ petition was allowed with the given directions, and connected miscellaneous petitions were closed without costs.