2024 (8) TMI 900 - HC - GST

Cancellation of petitioner s Goods and Services Tax (GST) registration - impugned cancellation order does not set out any reason for cancelling the petitioner s GST registration - violation of principles of natural justice - HELD THAT - There are merit in the petitioner s contentions that the SCN and the impugned cancellation order are unreasoned. The SCN records no reason for proposing to cancel the petitioner s GST registration. It merely states that proceedings for cancellation of the GST registration have been initiated. The impugned cancellation order is also unreasoned. Thus the SCN as well as the impugned cancellation order are liable to be set aside for the said reason alone. The impugned cancellation order cancelling the petitioner s GST registration is revoked. The respondents are directed to restore the petitioner s GST registration forthwith - Petition diposed off.

Summary

Issues: Impugning cancellation of Goods and Services Tax (GST) registration, unreasoned Show Cause Notice (SCN) and cancellation order, appeal rejection grounds.

In this case, the petitioner challenged the cancellation of their GST registration through a petition, stating that their hotel's management had changed, leading to confusion during officials' visit. The proper officer issued a Show Cause Notice proposing cancellation, citing initiation of cancellation as the reason. Despite the petitioner's response explaining the situation, the registration was cancelled retrospectively from 01.07.2017 without providing any specific reason. The petitioner's application for revocation was rejected, leading to an appeal under Section 107 of the CGST Act. However, the appeal was dismissed by the Appellate Authority for lack of attested documents and failure to submit ownership proof of the building, along with not obtaining a No Objection Certificate from the Anti Evasion Branch.

The Court found merit in the petitioner's argument that both the SCN and the cancellation order lacked reasoning. The SCN did not provide any rationale for the proposed cancellation, only stating the initiation of proceedings. Similarly, the cancellation order was also devoid of any reasoning. Consequently, both the SCN and the cancellation order were set aside due to lack of reasoning alone. The respondents later informed the Court that an inspection confirmed the petitioner's existence at the mentioned address. Following this, the Court directed the revocation of the cancellation order, instructing the restoration of the petitioner's GST registration immediately.

The Court clarified that while the cancellation order was revoked, it did not prevent authorities from taking future actions against the petitioner, including retrospective cancellation of GST registration, provided it was done in accordance with the law. Ultimately, the petition was disposed of in the aforementioned terms, along with the pending application.