Show Cause Notice set aside as it did not disclose any intelligible reason for Cancellation of GST Registration

[CA Bimal Jain]

The Hon’ble Delhi High Court in the case of RISHIRAJ ALUMINIUM PRIVATE LIMITED VERSUS GOODS AND SERVICE TAX OFFICER - 2023 (4) TMI 1124 - DELHI HIGH COURT set aside the Show Cause Notice and restored petitioner’s registration as did not sufficiently disclose the reason of suspension of GST registration and proposed cancellation.

Facts:

M/s Rishiraj Aluminium Pvt. Ltd. (“the Petitioner”) was issued a show cause notice (“the SCN”) dated March 13, 2023 where the Petitioner's GST Registration was suspended and the Petitioner was called upon to show cause why its GST Registration should not be cancelled.

The only reason stated in the SCN for proposing cancellation of the petitioner's GST Registration reads as: "Ceased to be liable to pay tax".

Issue:

Whether the SCN is valid if it did not sufficiently disclose the reason of suspension of GST registration?

Held:

The Hon’ble High Court RISHIRAJ ALUMINIUM PRIVATE LIMITED VERSUS GOODS AND SERVICE TAX OFFICER - 2023 (4) TMI 1124 - DELHI HIGH COURT held as under:

• Observed that the SCN must clearly set out the reasons for proposing an adverse action in order for the noticee to respond to the same. Hence, the petitioner was at a loss as to how to respond to the SCN as it did not disclose any intelligible reason for proposing cancellation of the petitioner's registration.
• Held that show cause notice is set aside and the petitioner's GST Registration is restored.

Relevant Provision:

Section 29 of the CGST Act:

“Cancellation or suspension of registration

29. (1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,……

(2) The proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where………”

(Author can be reached at [email protected])