2024 (5) TMI 1426 - HC - GST

Cancellation of GST registration of petitioner - registration obtained by means of fraud, wilful misstatement or suppression of facts - HELD THAT - Reference may be had to the Section 29 (2) of the Central Goods Service Tax Act, 2017 which interalia stipulates that during the pendency of the proceedings relating to cancellation of registration, the Proper Officer may suspend the registration for such period and such manner as may be prescribed - Reference may also be had to Rule 21-A (2) of the Central Goods Service Tax Rules, 2017, which interalia stipulates that where a Proper Officer has reason to believe that the registration of a person is liable to be cancelled under Section 29 of the Act, then he may suspend the registration of such person with effect from the date to be determined by him. Since the date of suspension of the registration is automatically determined by the portal as the date of the notice and there is no option with the proper officer to specify a different date, apparently, there is no conscious application of mind by the Proper Officer deciding to suspend the registration from the date of issuance of the Show Cause Notice. It is deemed expedient to direct a senior competent officer of the GSTN Network to file an affidavit indicating the manner in which the portal functions - Let the affidavit be filed within one week.

Summary

Issues involved: Impugning of Show Cause Notice for suspension of GST registration u/s 29(2)(e) on grounds of fraud, wilful misstatement, or suppression of facts.

Summary:
The petitioner challenged a Show Cause Notice dated 22.04.2024, suspending their GST registration based on Section 29(2)(e) alleging fraud, wilful misstatement, or suppression of facts. The Proper Officer, Mr. Kanaujiya, explained that the reasons in the notice were from a system drop-down menu and not detailed. The notice lacked the issuer's name, designation, and office. It stated the registration was suspended from the notice date, automatically set by the portal without discretion. The Court noted the lack of specific reasons in the notice and the automatic suspension mechanism. Referring to Section 29(2) of the CGST Act, 2017 and Rule 21-A(2) of the CGST Rules, 2017, the Court highlighted the Proper Officer's power to suspend registration during cancellation proceedings. Concerned about the system's automatic functions, the Court directed a senior GSTN officer to explain the portal's operations regarding reasons in notices, officer's options for additional grounds, personal details on notices, information available to the assessee, and the process of registration suspension. An affidavit detailing these aspects was ordered to be filed within a week, with the case listed for further hearing on 22.05.2024.