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2023 (8) TMI 308 - HC - GSTValidity of SCN - proper reason for cancellation of GST registration not given - it was alleged, in one liner that Registration has been obtained by means of fraud, willful misstatement or suppression of facts - HELD THAT - Such show cause notice is without any basis and there is no reason assigned in arriving at the conclusion for cancellation of Registration. It seems that before the order for cancellation of Registration, the respondent authority has not taken into consideration the reply dated 17.08.2022 given by the petitioner to the respondent authority. It transpires that on the same day i.e. on 17.08.2022, the order for cancellation of Registration came to be passed. The request for an opportunity of being heard in person was not accorded to the petitioner, though asked for. The issue involved in the present petition is no more res-integra in view of the the decision rendered by the Co-ordinate Bench of this Court in the case of OM TRADING VERSUS STATE OF GUJARAT 2023 (6) TMI 1054 - GUJARAT HIGH COURT wherein the Co-ordinate Bench of this Court has quashed and set aside the impugned order. In the present case on hand, it is clear that while issuing show cause notice for cancellation of Registration, necessary documents were not supplied and the notice is cryptic. It is also clear that while passing the impugned order for cancellation of Registration, the respondent authority has not assigned any reason and thus, the order passed by the respondent authority is not tenable at law. The show cause notice dated 04.08.2022 as well as the order dated 17.08.2022, are hereby quashed and set aside - petition allowed.
Issues Involved:
1. Validity of the show cause notice dated 04.08.2022. 2. Legality of the order dated 17.08.2022 canceling the registration certificate. 3. Compliance with principles of natural justice. Summary: Issue 1: Validity of the Show Cause Notice The petitioner challenged the show cause notice dated 04.08.2022 issued under Section 29 of the Central Goods and Services Tax Act, 2017, alleging that the registration was obtained by means of fraud, willful misstatement, or suppression of facts. The petitioner contended that the notice was cryptic and lacked specific reasons, making it impossible to respond appropriately. The court noted that the show cause notice was indeed vague, merely stating, "in case, Registration has been obtained by means of fraud, willful misstatement or suppression of facts,"¯ without providing any detailed basis or evidence. Issue 2: Legality of the Cancellation Order The petitioner argued that the order dated 17.08.2022 canceling the registration was passed without providing any material evidence or reasons and without considering the petitioner's reply. The court observed that the order was issued on the same day as the petitioner's reply and did not address the petitioner's request for a personal hearing. This indicated a lack of due consideration and procedural fairness. Issue 3: Compliance with Principles of Natural Justice The petitioner asserted that the cancellation order breached the principles of natural justice as it was issued without a proper hearing or detailed reasoning. The court referenced similar cases, such as Om Trading Vs. State of Gujarat and Aggrawal Dyeing and Printing Works Vs. State of Gujarat, where vague show cause notices and orders were quashed due to non-compliance with natural justice. The court found that in the present case, the respondent authority failed to provide necessary documents and reasons, rendering the cancellation order untenable. Conclusion: The court concluded that the show cause notice dated 04.08.2022 and the cancellation order dated 17.08.2022 were issued without proper basis and in violation of principles of natural justice. Consequently, both the notice and the order were quashed, and the respondent was directed to restore the petitioner's registration forthwith. The petition was allowed, and the rule was made absolute without any order as to costs.
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