2024 (6) TMI 1241 - HC - GST

Cancellation of registration of petitioner - petitioner has not filed the returns for six consecutive months and has not responded to Ext. P2 notice - HELD THAT - It is trite law that if the show cause notice is vague and where the order of cancellation also does not specify the factors that led to the cancellation of registration, the entire proceedings must be held to be bad in law. Further, it is a well settled salutory principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner. Since the proceedings were initiated by the 1st respondent in Form GST-REG-31 and not in Form GST-REG 17, Ext.P3 order is without jurisdiction. Ext. P3 is accordingly set aside. It is made clear that setting aside Ext. P3 will not have the effect of absolving the petitioner from any fiscal liability. The writ petition is disposed of.

Summary

Issues:
1. Cancellation of registration under CGST/KSGST Acts due to non-filing of returns.
2. Validity of show cause notice issued in Form GST-REG-31 instead of Form GST-REG 17.
3. Jurisdictional validity of the cancellation order.
4. Compliance requirements post restoration of registration.

Analysis:

1. The petitioner challenged the cancellation of registration under the CGST/KSGST Acts due to non-filing of returns. The petitioner, a registered dealer, received a show cause notice for not filing returns for six consecutive months. The petitioner failed to respond timely due to personal reasons, leading to the issuance of the cancellation order.

2. The petitioner argued that the show cause notice was issued in Form GST-REG-31 instead of Form GST-REG 17, as required by Rule 22 of the CGST/SGST Rules. The petitioner contended that the notice lacked specificity and was vague, violating procedural requirements. Reference was made to a previous judgment where similar grounds led to interference with cancellation orders.

3. The petitioner's counsel asserted that the entire cancellation procedure was illegal and unenforceable. It was highlighted that vague show cause notices and lack of specific reasons for cancellation render the proceedings legally flawed. The Court reiterated the principle that statutory procedures must be strictly adhered to, emphasizing the necessity of following prescribed formats.

4. The Court held that the cancellation order issued in Form GST-REG-31 was without jurisdiction, setting it aside. The petitioner was directed to fulfill all outstanding obligations, including filing defaulted returns with necessary payments, within two weeks of registration restoration. The judgment clarified that setting aside the order did not relieve the petitioner of fiscal responsibilities, leaving other issues in the petition open for future consideration.

In conclusion, the High Court of Kerala ruled in favor of the petitioner, emphasizing the importance of procedural compliance and specificity in show cause notices for registration cancellations under the CGST/KSGST Acts. The judgment highlighted the necessity of following prescribed formats and providing clear reasons for administrative actions, ensuring legal validity and fairness in tax-related proceedings.