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2021 (11) TMI 62 - HC - GST


Issues:
Challenge to the order for cancellation of registration under the UPGST Act, 2017 due to procedural irregularities and lack of proper notice.

Analysis:
The judgment deals with the challenge raised against the order for cancellation of registration under the UPGST Act, 2017. The petitioner contended that the initial show cause notice proposing cancellation was unintelligible, containing garbage language and symbols. The State admitted this mistake and claimed to have issued a physical notice on the same date, followed by an order. However, the petitioner disputed receiving the physical copies of the notice and the order. The State argued that despite the cancellation order, the GST Portal still displayed the petitioner's status as "active." The discrepancy led to further communication and the eventual service of the impugned cancellation order on the petitioner.

The court emphasized the serious consequences of registration cancellation on business rights and ITC entitlements under the GST Laws. It highlighted the mandatory requirement of issuing a proper prior notice and providing an opportunity to be heard before canceling registration, as per Section 29(2) of the UPGST Act, 2017. In this case, the notice uploaded on the GST Portal was incomprehensible, and there was no firm proof of service of the physical notice or the subsequent order. The order was not even uploaded on the GST Portal, and the petitioner's Chartered Accountant's application did not confirm receipt of the notice or order.

Due to the technical issue on the GST Portal, the cancellation order could not be enforced until a later date. The court found the cancellation to be ex-parte and contrary to the statutory requirement of providing a prior show cause notice. The delay in challenging the order was attributed to the COVID-19 pandemic and the State's failure to update information on the GST Portal. Consequently, the court set aside the cancellation order and remitted the matter for a fresh decision by the concerned authority, emphasizing the violation of natural justice principles.

The court waived the bar of alternative remedy due to the absence of a prior show cause notice and the State's responsibility for the delay and curtailment of the petitioner's business rights. The petitioner was directed to respond to the show cause notice and order within a specified period, following which the authority was instructed to conduct a hearing and issue appropriate orders within a month. The writ petition was allowed, and no costs were imposed in the matter.

 

 

 

 

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