2024 (5) TMI 239 - HC - GST

Cancellation of GST registration of the petitioner - petitioner has not been issued with any SCN - Violation of principles of natural justice - Predetermined action - HELD THAT - A bare perusal of the aforesaid contents of the impugned order would clearly reflect that the reasons assigned for cancellation of registration is invoking clause No.29(2)(E) whereby it alleged that the registration has been obtained by means of fraud, willful misstatement or suppression of facts. It also reveals that the cancellation was based preliminarily on e-mail received on 28.06.2023 from the office of the Director General of Goods and Service Tax (Intelligence), Hyderabad Zonal Unit. However, the contents of the e-mail dated 28.06.2023 from the Director General were never made available to the petitioner. The petitioner is not aware of the contents of the said e-mail. It is apparently clear that for the reasons for which the registration stands cancelled by the impugned order dated 04.07.2023, the petitioner has not been put to notice or has been granted an opportunity to give an explanation to the same. For this reason alone, the impugned order is liable to be interdicted. The impugned order is not sustainable and the same deserves to be and is accordingly set aside/quashed - Petition allowed.

Summary

Issues involved: Challenge to the order of cancelling GST registration based on procedural irregularities and lack of opportunity for explanation.

The Writ Petition challenged the order of respondent No.1 cancelling the petitioner's GST registration, citing procedural irregularities and lack of opportunity for explanation. The petitioner argued that the grounds for cancellation in the order did not match those in the show cause notice, and no show cause notice was issued for the reasons stated in the order. The petitioner contended that the order should be set aside on this ground alone.

The show cause notice issued to the petitioner highlighted discrepancies in reported sales compared to e-way bills and directed a response within seven working days. The petitioner promptly replied on 01.07.2023, but the impugned order was passed on 04.07.2023 without considering the response. The impugned order cited Section 29(2)(e) for cancellation due to alleged fraud, willful misstatement, or suppression of facts, based on an email from the Director General of Goods and Service Tax Intelligence, which was not shared with the petitioner.

The Court noted that the reasons for cancellation were not properly communicated to the petitioner, as the contents of the crucial email were withheld. Additionally, the haste in scheduling a personal hearing before the petitioner's response deadline raised suspicions of a predetermined outcome. The Court referenced a similar case where an order of cancellation was previously overturned, highlighting a pattern of procedural flaws.

In light of the procedural irregularities and lack of opportunity for the petitioner to respond adequately, the Court deemed the impugned order unsustainable and set it aside. Consequently, the rejection of the petitioner's application for revocation was also overturned. The Writ Petition was allowed, with no costs imposed, and any related pending petitions were closed.