2024 (9) TMI 603 - HC - GST

Seeking revocation of the cancellation order - petitioner neither responded to the SCN nor appeared before the concerned proper officer on the appointed date and time - HELD THAT - It is seen that the impugned SCN, whereby the petitioner was called upon to show cause why its GST registration not be cancelled, did not set out any intelligible reasons. It merely reproduced the provisions of Section 29(2)(e) of the Central Goods and Services Tax Act, 2017. The said provision enables the proper officer to cancel the taxpayer s GST registration if it is obtained by means of fraud, wilful misstatement or suppression of facts. The impugned SCN did not indicate any alleged fraud or mention any statement, which is alleged to be a wilful misstatement. It also did not set out any facts, which are alleged to have been suppressed by the petitioner. There are merit in the petitioner s contention that the impugned cancellation order was passed in violation of the principles of natural justice. The learned counsel for the petitioner has confined the present petition to seeking an opportunity to respond to the said allegations. Thus, notwithstanding that the impugned cancellation order is liable to be set aside on falling foul of the principles of natural justice, it is not considered apposite to set aside that order - the order dated 01.05.2024 whereby the petitioner s application for revocation of the impugned cancellation order was rejected, is set aside. Petition disposed off.

Summary

Issues:
Impugning a Show Cause Notice and a cancellation order related to GST registration, application for revocation of cancellation order, rejection of the revocation application, violation of principles of natural justice in passing the cancellation order.

Analysis:
The petitioner challenged a Show Cause Notice (SCN) and a subsequent order cancelling their GST registration. The petitioner also filed an application for revocation of the cancellation order, leading to another SCN calling for justification. The reasons for revocation included vague address details and a significant turnover within a short period with full GST payment from Input Tax Credit (ITC). However, the petitioner failed to respond to the second SCN or appear before the proper officer, resulting in rejection of the revocation application. The court noted that the initial SCN lacked specific reasons for cancellation based on fraud or misstatement, violating natural justice principles.

The court acknowledged the deficiencies in the initial SCN but upheld the cancellation order due to the petitioner's failure to respond to subsequent allegations. The court set aside the rejection of the revocation application to allow the petitioner a chance to address the concerns raised in the second SCN. The petitioner was granted two weeks to respond, and the proper officer was directed to consider the reply and make a decision after providing an opportunity for the petitioner to be heard. The court disposed of the petition accordingly, providing the petitioner with an opportunity to rectify the situation and respond to the allegations raised in the second SCN.