2022 (3) TMI 443 - HC - GST

Cancellation of registration of applicant - similar two SCN issued in past, were dropped - HELD THAT - In the past, twice such show cause notices were issued and those were ordered to be dropped or to put in other words, such show cause notices were discharged. The show cause notice referred is as vague as anything. The order cancelling the registration is something beyond vagueness. It is very distressing to note that this is an everyday affair. Scores of petitions of the present type come up before us everyday because of such absurd and vague orders being passed by the officers of the GST Department. Once again, Mr. Sharma with all the embarrassment that is being caused to him everyday while defending such erring officers conceded that the order as vague as anything. We are not able to understand how the Department is functioning, why the Department is acting in such a high handed manner. Over a period of time, this High Court must have passed not less than hundred orders criticising such vague show cause notices and vague final orders cancelling the registration. Why the officers are not ready to understand and improve themselves. The impugned order passed by the Assistant Commissioner, respondent No.2 herein, cancelling the registration, Annexure A to this writ application is hereby quashed and set aside. Application disposed off.

Summary

Issues:
Challenge to cancellation of GST registration based on vague show cause notice and order.

Analysis:
The petitioner filed a writ application under Article 226 challenging the order cancelling their GST registration. The Assistant Commissioner issued a show cause notice citing reasons for cancellation, but the notice was vague and lacked clarity. The impugned order cancelling the registration was also found to be vague and without proper reasoning. The High Court expressed concern over the frequency of such cases where officers issue unclear notices and orders, causing distress to the petitioners. The Court highlighted the need for officers to improve their understanding and functioning to avoid such situations.

The Court noted that similar show cause notices had been issued in the past, only to be dropped later. The vagueness of the current notice and order raised serious doubts about the functioning of the GST Department. The respondent's counsel admitted that both the show cause notice and the cancellation order lacked clarity and coherence. The Court criticized the high-handed manner in which the Department was operating and expressed disappointment over the repeated instances of such vague orders coming before the Court. The judgment emphasized the necessity for the Department to enhance its processes and ensure proper communication in such matters.

In light of the above observations, the High Court quashed and set aside the impugned order cancelling the petitioner's GST registration. The Court disposed of the writ application with this direction, highlighting the importance of clarity and proper reasoning in administrative actions such as cancellation of registrations. The judgment serves as a reminder to the concerned authorities to adhere to due process and provide clear, reasoned decisions in such matters to avoid unnecessary litigation and distress to the affected parties.