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2024 (7) TMI 1243 - HC - GSTCancellation of GST registration number - activity of passing fake Input Tax Credit - HELD THAT - There are merit in the petitioner s contention that the petitioner that the impugned SCN is vulnerable as it does not set out the allegations on the basis of which the petitioner s GST registration is proposed to be cancelled. It is relevant to note that the object of a show cause notice is to enable the noticee to respond to the allegations. In the present case the petitioner is now duly informed about the allegations on the basis of which his GST registration is proposed to be cancelled. Although a copy of the Memo which is referred to in the impugned SCN has not been provided to the petitioner the learned counsel for the respondent has in unambiguous terms stated that the allegations as noted in the counter-affidavit and as noted above are the only allegations set out in the Memo. In the given facts setting aside the impugned SCN would serve little purpose apart from the requiring the respondent to once again carry out the exercise of issuing a show cause notice. Petition disposed off.
Issues: Impugning show cause notice for GST registration cancellation and suspension.
In this case, the petitioner challenged a show cause notice (SCN) dated 26.06.2024, which proposed the cancellation of the petitioner's GST registration and suspended it based on two reasons. The first reason was related to the returns furnished under the Central Goods and Services Tax Act, 2017, while the second reason was based on information indicating the non-existence or non-functionality of the petitioner's business at the principal place. Additionally, concerns were raised about the petitioner's involvement in fake transactions and passing fake Input Tax Credit (ITC). The petitioner was required to respond to the SCN within thirty days and appear before the Proper Officer for a hearing. However, the petitioner contended that they did not receive the specific memo mentioned in the SCN, which hindered their ability to respond effectively. The respondent acknowledged that the memo was not communicated to the petitioner, leading to a lack of clarity regarding the allegations. The counter-affidavit filed highlighted the allegations against the petitioner, focusing on passing fake ITC to another dealer, resulting in a substantial amount. The Court found merit in the petitioner's argument that the SCN lacked specificity in detailing the grounds for cancellation. Despite this, the Court noted that the petitioner was now aware of the allegations through the counter-affidavit, which clarified the basis for the registration cancellation proposal. Given the circumstances, the Court decided not to set aside the SCN but allowed the petitioner to respond to the allegations outlined in the counter-affidavit within four working days. The petitioner was directed to appear before the Proper Officer for further proceedings. The Court emphasized the importance of a timely decision on the GST registration status and urged the Proper Officer to expedite the process, preferably within a week from the specified date. The Proper Officer was granted the discretion to request additional material or documents deemed necessary for the decision-making process. Ultimately, the petition was disposed of under the outlined terms, ensuring the petitioner's right to respond and the Proper Officer's prompt consideration of the matter.
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