2024 (8) TMI 440 - HC - GST

Cancellation of GST registration of the petitioner with effect from 18-4-2023 - violation of the principles of natural justice - HELD THAT - The impugned order dated 16-11-2023, the subsequent show cause notice dated 26-10-2023, both do not disclose either these facts giving justification of dropping of the proceedings. Moreover, the subsequent show cause notice though mentions that seven days time is granted, but the petitioner was directed to appear before the respondent authorities within less than 24 hours of time, which apparently compels this Court to reach to the conclusion that there has been violation of principles of natural of justice. Firstly, for not giving reasonable time for the petitioner to respond to the show cause notice and secondly, the reply which the petitioner had submitted not having been considered or appreciated while passing the impugned order on 16-11-2023. The impugned order is quashed - petition allowed.

Summary

Issues:
Challenge to cancellation of GST registration based on violation of principles of natural justice.

Analysis:
The writ petition challenged the order cancelling the petitioner's GST registration. The petitioner argued that a show cause notice was issued initially, and upon providing an explanation, the proceedings were dropped. However, a fresh show cause notice was issued on the same day, leading to confusion. The petitioner submitted a reply to this subsequent notice as well, but the impugned order stated otherwise, resulting in the cancellation of GST registration. The petitioner contended that the subsequent notice did not provide reasons for issuance, and the timeline for response was unjustly short, violating principles of natural justice. Despite the petitioner submitting a reply, it was not considered in the impugned order. The Department claimed to have received new incriminating information after dropping the initial proceedings and cited errors in the effective cancellation date as reasons for issuing a fresh notice. However, these justifications were not disclosed in the impugned order or subsequent notice. The Court found violations of natural justice due to insufficient response time and failure to consider the petitioner's reply, leading to the order being set aside. The Department was granted the option to initiate fresh proceedings lawfully if desired.

This detailed analysis of the judgment highlights the procedural irregularities and violations of natural justice that led to the cancellation of the GST registration being overturned by the Court. The judgment emphasizes the importance of adhering to principles of natural justice in administrative proceedings to ensure fairness and due process.