2024 (7) TMI 524 - HC - GST

Challenge to SCN issued by the respondent authorities for cancellation of the registration - no detailed reasons for issuance of SCN - HELD THAT - It goes without saying that the approch of the respondent authorities is appreciable so as to comply with the principles of natural justice by giving an opportunity to the assessees before cancellation of the registration number so as to avoid unnecessary litigation before this Court. It is hoped that the respondent authorities shall adhere to the aforesaid directions issued by this Court in the year 2022 and no further show-cuase notices without any detailed reasons would be issued henceforth or any order of cancellation of registration shall be passed without assiging the detailed reasons by the respondent authorities, failing which, this Court shall be complelled to pass appropriate orders for cost against the Officers who would pass the orders in breach of the principles of natural justice though brought to their notice by the highest Authority of the Department by the aforesaid Standard Operating Procedures circulated to all the Officers of the respondent Departments. Petition disposed off.

Summary

Issues:
Challenging show-cause notices for registration cancellation lacking detailed reasons.

Analysis:
The petitioners challenged show-cause notices issued by respondent authorities for registration cancellation due to lack of detailed reasons. The Court referred to a previous case where guidelines were provided for such situations. The Court directed the respondent authorities to take appropriate action to implement the guidelines and file a detailed affidavit stating the actions to be taken within two weeks. The respondent-State Tax Officer filed an affidavit stating the instructions issued to grant opportunities for hearing and pass speaking orders. A Standard Operating Procedure (SOP) was issued detailing the procedure for cancellation of registration. The Chief Commissioner was directed to ensure compliance and disciplinary action against non-compliance.

The respondent authorities assured the Court of implementing the SOP for issuing detailed show-cause notices for registration cancellation. Both sides agreed to cooperate for timely disposal of notices. The Court appreciated the respondent authorities for complying with the principles of natural justice and avoiding unnecessary litigation. The Court emphasized the importance of providing detailed reasons for cancellation orders to prevent breaching natural justice principles. The Court warned of imposing costs on officers failing to comply with the guidelines.

The Court disposed of the petitions with the liberty to revive if needed, expecting both parties to adhere to the proposed timeline. The Court emphasized the significance of following the directions issued in 2022 to avoid issuing show-cause notices without detailed reasons or passing registration cancellation orders without proper justification. The judgment highlighted the importance of upholding natural justice principles in administrative actions to prevent legal challenges and ensure fair procedures.