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2023 (4) TMI 1124 - HC - GSTCancellation of GST registration of petitioner - reason for cancellation is Ceased to be liable to pay tax - HELD THAT - There is merit in the petitioner s contention that in the present case the petitioner was at a loss as to how to respond to the impugned show cause notice as it did not disclose any intelligible reason for proposing cancellation of the petitioner s registration. The impugned show cause notice is set aside. The petitioner s GST Registration is restored - Petition allowed.
Issues involved: Impugning a show cause notice for suspension and proposed cancellation of GST Registration.
The petitioner challenged a show cause notice dated 13.03.2023, which suspended their GST Registration and called for a response regarding the potential cancellation. The notice cited the reason as "Ceased to be liable to pay tax." The petitioner argued that they had been compliant with tax filings and payments, yet their registration was suspended without clear reasons. The court found the notice deficient, lacking specific details to justify the proposed cancellation, and deemed it unsustainable. Despite granting time for the respondent to reply, no response was filed. The respondent's counsel sought an adjournment due to the main counsel's illness. The learned counsel for the respondent failed to defend the deficient show cause notice, which did not adequately explain the basis for suspending or canceling the petitioner's GST Registration. It was emphasized that a show cause notice must provide clear reasons for any adverse action to enable the affected party to respond effectively. The petitioner was unable to formulate a response due to the lack of intelligible reasons in the notice. Consequently, the court set aside the impugned show cause notice and restored the petitioner's GST Registration. However, the respondent was not barred from issuing a fresh notice with detailed reasons if they intended to proceed with the cancellation. The petitioner would have a full opportunity to address any reasons before any adverse decision is made. The petition was allowed on these terms, and the pending application was disposed of.
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