2023 (2) TMI 981 - HC - GST

Cancellation of registration of petitioner - petitioner s registration was cancelled on the ground that the petitioner had neither appeared for a personal hearing nor submitted any reply - HELD THAT - There is no statutory provision that requires a taxpayer to seek an NOC from any authority for moving an application for revocation of cancellation of its registration. It is found that the procedure adopted by the respondents for cancellation of the registration is flawed. As noted above, the impugned show cause notice cannot be considered as a show cause notice at all and therefore, the impugned order dated 11.10.2022, cancelling the petitioner s registration, has been passed in violation of principles of natural justice and is liable to be set aside. The impugned show cause notice dated 22.09.2022 as well as the impugned order dated 11.10.2022, cancelling the petitioner s GSTIN Registration, are set aside - petition allowed.

Summary

Issues:
1. Cancellation of GST registration and issuance of show cause notice without proper grounds or reasons.

Analysis:
The petitioner filed a petition seeking directions to reinstate their GST registration, challenging a show cause notice and subsequent order canceling the registration. The show cause notice alleged non-compliance without specifying any particular provisions violated, rendering it impossible for the petitioner to respond effectively. The court emphasized the importance of a show cause notice providing specific allegations to enable a meaningful response, deeming the notice in this case inadequate and devoid of reasoning. Consequently, the court held that the notice was not valid as it did not fulfill the fundamental purpose of enabling the petitioner to address the allegations against them.

The impugned order cancelling the petitioner's GST registration was based on their failure to respond to the deficient show cause notice. The petitioner had not participated in a personal hearing or submitted a reply, leading to the cancellation of registration. Despite the petitioner's subsequent application for revocation of the cancellation order, which was still pending, the concerned authority had not taken any action. The court noted that the cancellation process was flawed, especially as there was no statutory requirement for the petitioner to obtain a No Objection Certificate (NOC) from any authority before applying for revocation of the registration cancellation. The court found the cancellation order to be in violation of natural justice principles due to the deficient show cause notice and ordered the cancellation to be set aside.

In conclusion, the court allowed the petition, setting aside both the inadequate show cause notice and the cancellation order of the petitioner's GST registration. The court clarified that this decision did not prevent the respondents from initiating fresh proceedings in compliance with the law, emphasizing the importance of adherence to procedural fairness and principles of natural justice in such matters.