2024 (7) TMI 674 - HC - GST

Levy of penalty - cancellation of GST registration - no reasons for cancellation was provided - violation of principles of natural justice - HELD THAT - It is evident that no reasons are recorded for the conclusion that the petitioner's reply is an after thought and that such reply does not establish existence at the registered place of business at the time of inspection. Such conclusions disclose that the explanation of the petitioner with regard to shifting the place of business was not taken into consideration. Since findings were recorded without assigning reasons in support thereof, the impugned order cannot be sustained. The impugned order dated 19.03.2024 is set aside and the matter is remanded for re-consideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to issue a fresh order within three months from the date of receipt of a copy of this order. Petition disposed off by way of remand.

Summary

Issues:
Challenge to penalty imposition based on GST registration cancellation and mismatch in returns.

Analysis:
The petitioner challenged an order imposing a penalty following a cancellation of GST registration. The petitioner shifted business premises, leading to the cancellation of GST registration, later revoked. Discrepancies were found in the petitioner's returns. The petitioner argued that the penalty imposition lacked reasoning despite explanations provided. The respondent argued that natural justice principles were followed. The order confirmed the penalty due without proper reasoning, disregarding the petitioner's explanations.

The court found that the order lacked reasoning for rejecting the petitioner's explanations regarding the business premises shift. As a result, the court set aside the impugned order and remanded the matter for reconsideration. The respondent was directed to issue a fresh order within three months, providing the petitioner with a reasonable opportunity, including a personal hearing. The writ petition was disposed of accordingly, with no costs incurred. Subsequently, related motions were closed.