2024 (7) TMI 1349 - HC - GST

Cancellation of GST registration of petitioner with retrospective effect - impugned order does not indicate any reason for cancelling the petitioner s GST registration - violation of principles of natural justice - HELD THAT - There are merit in the contention of the petitioner that the petitioner s GST registration could not have been cancelled without affording the petitioner an opportunity of personal hearing to address the aspect of cancellation of GST registration with retrospective effect. The impugned order is set aside and the matter is remanded to the Proper Officer for consideration afresh. The petitioner may file its reply to the impugned SCN within the period of two weeks from date. The Proper Officer will consider the reply of the petitioner and take an informed decision after affording an opportunity of being heard to the petitioner. Petition disposed off by way of remand.

Summary

Issues:
1. Impugning an order cancelling GST registration with retrospective effect.
2. Lack of opportunity for personal hearing before cancellation.
3. Authority of Proper Officer to cancel registration with retrospective effect.

Analysis:
1. The petitioner challenged an order cancelling their GST registration with retrospective effect from 26.10.2017. The impugned order lacked reasons for cancellation apart from referring to a Show Cause Notice dated 08.02.2021. The petitioner was required to respond to the notice within seven working days, failing which an ex-parte decision would be made. The registration was suspended from the date of the notice. However, the notice did not propose cancellation with retrospective effect, and no specific date for a personal hearing was provided.

2. The Court acknowledged the petitioner's argument that cancellation without a personal hearing to address retrospective effect was unfair. The petitioner's counsel expressed readiness to accept the cancellation but contested the retrospective aspect. The Court found no valid reason to cancel the registration for a period when returns were filed on time. The respondent's counsel argued that the Proper Officer had the authority under Section 29(2) of the Central Goods and Services Tax Act, 2017, to cancel registration retrospectively as deemed appropriate. The Court agreed to remand the matter to the Proper Officer for reconsideration after hearing the petitioner.

3. Considering the delay in approaching the Court and the circumstances of the case, the Court accepted the respondent's submission for remand. The impugned order was set aside, and the matter was referred back to the Proper Officer for fresh consideration. The petitioner was given two weeks to respond to the Show Cause Notice, and the Proper Officer was directed to make a decision after hearing the petitioner. The petition was disposed of accordingly, along with any pending applications.