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2022 (9) TMI 1107 - HC - GSTCancellation of petitioner's registration - scope and validity of SCN - SCN did not mention the reason why the concerned authority proposed the cancellation of registration - HELD THAT - A plain reading of the order would show, that the petitioner s registration was cancelled on account of an enquiry pending against the petitioner, which evidently is being carried out by DGGI, Chennai concerning supply of spurious goods - Furthermore, it is also indicated, as is evident on a plain reading of the impugned order, that the premises of the petitioner were physically verified by the Range Inspector, after receiving approval from the competent authority, and that it was found that the premises had been sealed by DGGI, Chennai. Although, as per the impugned order, the Range Inspector appears to have physically verified the petitioner s premises, neither was any notice given of the physical verification, nor is the report which was generated after the verification, uploaded on the portal - This was required to be done, as provided in Rule 25 of the CGST Rules. Petition allowed.
Issues:
Cancellation of registration based on show-cause notice lacking specificity and natural justice principles. Analysis: The writ petition challenged the cancellation of registration based on an order dated 04.05.2022 by the Superintendent, Ward-66. The order was founded on a show-cause notice (SCN) dated 31.03.2022, which lacked specificity regarding the reasons for proposing the cancellation of registration. The SCN failed to provide any broad facts demonstrating fraud, willful misstatement, or suppression of facts by the petitioner. Despite the petitioner filing a reply within the stipulated time frame, the registration was cancelled based on an enquiry pending against the petitioner by DGGI, Chennai concerning supply of "spurious goods." The impugned order indicated that the premises of the petitioner were physically verified, and it was found sealed by DGGI, Chennai. However, no tax, interest, penalty, or cess was due from the petitioner. The cancellation of registration was not supported by the content of the SCN, and the Range Inspector's verification report was not uploaded as required by Rule 25 of the CGST Rules. The respondents failed to provide a satisfactory response regarding the verification report, leading to an infringement of Rule 25 of the CGST. The impugned order went beyond the scope of the SCN, warranting the cancellation to be set aside. The court allowed the prayer in the writ petition, setting aside the impugned order and directing the respondents to restore the registration of the petitioner. However, it was clarified that this order would not prevent the respondents from issuing a fresh SCN or continuing the investigation against the petitioner in accordance with the law. The writ petition was disposed of accordingly, emphasizing adherence to natural justice principles and procedural fairness in such matters.
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