2024 (9) TMI 98 - HC - GST

Challenge to SCN - SCN does not contain necessary factual details and is only reproduction of Section 29(2)(e) of Central Goods and Services Tax Act, 2017 - Violation of principles of natural justice - HELD THAT - There are substance in the argument of learned counsel for the petitioner that such a notice runs contrary to principles of natural justice and deprives the assessee to file an effective reply to the show cause notice. The impugned SCN is liable to be interfered with because it does not disclose minimum/elementary factual details on the basis of which power under Section 29 of the Act is invoked. Mere reproduction of offending clause or enabling provision cannot be a reason to give stamp of approval to a show cause notice which lacks minimum essential details. The impugned show cause notice dated 24.05.2024 is set aside - Petition allowed.

Summary

Issues:
Challenge to show cause notice lacking necessary factual details.

Analysis:
The petition challenged a show cause notice dated 24.05.2024 for lack of necessary factual details, contending that it only reproduced Section 29(2)(e) of the Central Goods and Services Tax Act, 2017. The petitioner argued that without essential details, an effective reply could not be filed, leading to the suspension of the petitioner's registration. The respondent, a Special Government Pleader for State Tax, supported the notice but acknowledged the absence of disclosed factual basis for the notice. The Court noted previous instances of interfering with similar notices lacking essential details, emphasizing the importance of natural justice principles and the right to file an effective reply. Referring to past cases, the Court highlighted the need for notices to contain precise and unambiguous information to enable parties to respond adequately. The Court criticized the issuance of cryptic notices that suspend taxpayer registrations without proper reasons, impacting livelihood and violating constitutional rights. The judgment set aside the impugned notice dated 24.05.2024 due to the lack of minimum factual details required for invoking power under Section 29 of the Act. The Court reserved liberty for the respondents to proceed in accordance with the law and directed the Special Government Pleader to inform the authorities to avoid issuing such deficient notices in the future.

This detailed analysis of the judgment showcases the Court's emphasis on the importance of providing necessary factual details in show cause notices to uphold principles of natural justice and ensure the right of the affected party to respond effectively. The judgment serves as a reminder to authorities to avoid issuing cryptic notices that lack essential information, as such actions can have adverse consequences on taxpayers' livelihoods and constitutional rights.