2024 (12) TMI 64 - HC - GST

Cancellation of registration of petitioner - cancellation order does not refer any reason for cancelling the registration of the petitioner - violation of principles of natural justice - HELD THAT - The record shows that cancellation order has neither refer any violation of conditions mentioned under Section 29 (2) (a) to (e) of the GST Act nor reason has been mentioned for cancellation of registration of the petitioner. Further in the impugned order neither any reference whatsoever nor any finding was recorded to the effect of the material used against the petitioner nor any finding was recorded that the alleged material used against the petitioner was confronted with. In the absence of any such finding, the appellate order cannot be sustained in the eyes of law. This Court in APPARENT MARKETING PRIVATE LIMITED. VERSUS STATE OF U.P. AND 3 OTHERS 2022 (3) TMI 493 - ALLAHABAD HIGH COURT decided on 5.3.2022 has set aside the impugned order with liberty to the respondent authority to issue a notice in accordance with Section 29 (2) of the Act. The impugned orders dated 31.3.2022, 26.3.2021 and 16.12.2020 are hereby set aside - Petition allowed.

Summary

Issues:
Cancellation of GST registration without proper reason and violation of procedural requirements for revocation application and appeals.

Analysis:
The petitioner, engaged in the business of Iron and Steel scrap, had their GST registration cancelled after a survey by the GST Department alleged no business activity at the premises. The cancellation was followed by a revocation application, which was rejected without proper reason or opportunity for a personal hearing. The petitioner filed appeals against both the cancellation and rejection of revocation, claiming lack of proper opportunity for hearing and absence of evidence against them.

The Court noted that the cancellation order did not specify any reason for the registration cancellation and the revocation application rejection lacked proper reasoning or opportunity for a hearing. The statutory provisions for cancellation under Section 29(2) of the Act were not found to have been violated by the petitioner. The Court emphasized the importance of recording specific findings and reasons for cancellation, which were absent in this case.

Referring to a previous case, the Court highlighted the necessity of issuing notices in accordance with Section 29(2) of the Act before taking action against a registration. As the impugned orders lacked proper reasoning and findings, the Court set aside the orders dated 31.3.2022, 26.3.2021, and 16.12.2020. The respondent authority was given the opportunity to issue a fresh notice based on specified grounds under the Act for further proceedings.

The Court allowed the writ petition, directing the respondent to pay a cost of Rs. 10,000 to the petitioner. A compliance affidavit was ordered to be filed by the respondent, and the case was listed for further hearing on a specified date. The judgment emphasized the need for procedural fairness and adherence to statutory requirements in matters of registration cancellation and revocation applications.