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2021 (11) TMI 62 - HC - GSTCancellation of registration of petitioner - section 129 of UPGST Act - HELD THAT - Undeniably cancellation of registration has serious and far reaching consequences on the rights of the dealer/person engaged in any business. Such cancellation may even take away the right to conduct business. Also, in the context of the GST Laws, it has further consequence of upsetting ITC entitlement on sale and purchase by such a person/dealer. Even so, the Act itself obligates the authority to issue a prior notice and afford a proper opportunity of hearing to the concerned before cancellation of his registration. This mandatory requirement is contained in the first proviso to Section 29(2) of the UPGST Act, 2017. In the facts of the present case, undisputedly the notice that was uploaded on the GST Portal was unintelligible - the bar of alternative remedy is lifted, as it is found that the petitioner's registration was cancelled without issuance of any prior show cause notice. Also, the delay is largely on account of the conduct of the State respondents or conduct attributable to the State respondents as they alone were responsible to update the information on the GST Portal. That not done, the petitioner/citizen may not be relegated to the forum of alternative remedy as his valuable right to do business has been curtailed in violation of principle of natural justice. The order dated 30.6.2018 cancelling the petitioner's registration is set aside. The matter is remitted to respondent no.3 to pass a fresh order, in accordance with law - Petition allowed by way of remand.
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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