2023 (1) TMI 237 - HC - GST

Cancellation of registration of petitioner - service of notice - violation of statutory requirement of according hearing to the person provided or not - breach of principles of natural justice - HELD THAT - The show cause notice which has been given to the petitioner is not in prescribed format as it is conspicuous by absence of the date and time on which the noticee was to appear for personal hearing. It is also clear from the prescribed format that the noticee has to be afforded opportunity of personal hearing and for that purpose he has to be informed in advance, the date and time on which hearing will take place. Since in the instant case, the show cause notice does not mention the date and time appointed for personal hearing, therefore, in our opinion, the proceedings held in pursuance thereof are rendered illegal, void and a nullity in the eyes of law. Petition allowed.

Summary

Issues:
Cancellation of registration under the Uttar Pradesh Goods and Services Tax Act, 2017 without proper notice and opportunity for hearing.

Analysis:
The petitioner challenged the cancellation of their firm's registration under the Uttar Pradesh Goods and Services Tax Act, 2017, and the subsequent coercive action. The petitioner received a show cause notice on 31.08.2019, requiring a response within seven working days, failing which an ex parte decision would be made based on available records. The cancellation order dated 21.09.2019 stated the effective cancellation date and the payable amounts. The petitioner argued that the notice was not sent by registered post, and the lack of specific date and time for the personal hearing violated procedural requirements and principles of natural justice.

The counsel for the petitioner contended that service via the common portal was inadequate due to technical issues, citing a Madras High Court judgment. The counsel for the revenue acknowledged the absence of a specific date and time for the personal hearing in the show cause notice, admitting a procedural lapse. The court noted that under Section 29 of the Act, the person must be given an opportunity to be heard, and Rule 22(1) mandates issuing a notice in Form GST REG-17 for cancellation, specifying the date and time for the personal hearing.

The court highlighted the discrepancy in the show cause notice provided to the petitioner, lacking the essential date and time for the personal hearing as required by the prescribed format. Due to this deficiency, the court deemed the proceedings and subsequent cancellation order illegal, void, and null. Consequently, the court quashed the impugned order, allowing the petition with liberty for the Revenue to proceed lawfully.

In conclusion, the court ruled in favor of the petitioner, emphasizing the importance of adhering to procedural requirements and principles of natural justice in cancellation proceedings under the Uttar Pradesh Goods and Services Tax Act, 2017. The judgment underscored the necessity of providing a clear opportunity for a personal hearing by specifying the date and time in the show cause notice, ensuring fairness and compliance with statutory provisions.