2024 (8) TMI 701 - HC - GST

Cancellation of registration of petitioner - order of cancellation does not contain any reasons and there is no mention as to whether the objections of the petitioner had been considered at all - HELD THAT - The undisputed fact, that can be seen from the record placed before this Court, is that a reason was set out in the show cause notice for initiating the process of cancellation of registration. The petitioner filed his objections to the said proposal. The 1st respondent, without referring to any of those objections and without assigning any reasons in the order, had directed cancellation of registration of the petitioner. Such an order, without assigning reasons and without considering the objections of the petitioner, is a clear violation of the principles of natural justice and requires to be set aside. The impugned order of the 1st respondent is set aside - the writ petition is disposed off.

Summary

Issues:

Cancellation of registration under the CGST Act without proper reasoning and consideration of objections leading to violation of principles of natural justice.

Analysis:

The petitioner, a registered dealer under the CGST Act, received a show cause notice dated 14.10.2023, alleging the issuance of invoices without the supply of goods/services, leading to wrongful availment of input tax credit or tax refund. The notice did not specify the issuer. The petitioner was given seven days to respond and appear before the issuer on 18.10.2023. The petitioner submitted objections on 17.10.2023 to the 1st respondent, who later canceled the registration without providing reasons or considering the objections. The petitioner contended that the cancellation was based on a letter from the Assistant Commissioner, not the show cause notice. The respondent argued that reasons were available on the portal but could not be downloaded due to system restrictions. The Court found that the cancellation without reasons and consideration of objections violated natural justice principles and set aside the order.

The Court noted that the show cause notice initiated the cancellation process, and the petitioner had submitted objections. However, the 1st respondent canceled the registration without referencing the objections or providing reasons. The Court held that such action disregarded natural justice principles and ordered the cancellation to be set aside. The Court clarified that the respondent could take further action if there were violations of the CGST Act, and the petitioner's registration would be restored. No costs were awarded, and pending applications were closed as a result of the judgment.