2024 (9) TMI 1293 - HC - GST

Cancellation of petitioner s GST registration with retrospective effect - petitioner has had no opportunity to respond to the allegations - Violation of principles of natuarl justice - HELD THAT - The impugned order, which has been passed, cancelling the petitioner s GST registration, falls foul of the principles of the natural justice. Concededly, the petitioner has had no opportunity to respond to the allegations on the basis of which the said action was premised. Neither the SCN nor the impugned order reflect any reasons for cancelling the petitioner s GST registration. The impugned order is set aside. The petitioner s GST registration is directed to be restored forthwith - Petition disposed off.

Summary

Issues:
Impugning cancellation of GST registration with retrospective effect and seeking directions to file returns for a specific month.

Analysis:
The petitioner challenged the cancellation of their GST registration with retrospective effect from a specific date and requested directions to file returns for a particular month. The petitioner claimed to have been operating an advertising agency and had valid GST registration. They transitioned their business to a One Person Company (OPC) in November 2022 and continued filing GST returns until January 2023. A Show Cause Notice (SCN) was issued in February 2023, citing "Others" as the reason for cancellation, leading to the suspension and subsequent cancellation of the GST registration.

The petitioner sought condonation of delay for filing an application to revoke the cancellation order, which was met with a Show Cause Notice questioning the delay. Subsequently, an appeal under Section 107 of the Central Goods & Services Tax Act, 2017 was filed, challenging the cancellation, but it was dismissed due to exceeding the stipulated filing period. The respondent contended that reasons for cancellation were provided but not communicated due to a technical glitch, leading to a violation of natural justice principles.

The court found that the impugned order lacked reasons for cancellation and deprived the petitioner of the opportunity to respond, thus violating natural justice principles. Consequently, the court set aside the impugned order, directed the restoration of the petitioner's GST registration, and mandated the filing of pending returns within thirty days. The petitioner was allowed to apply for cancellation of GST registration due to business transfer, subject to legal considerations. The respondent was not barred from initiating fresh proceedings for non-compliance or dues recovery as per the law.

In conclusion, the petition was disposed of with the impugned order being overturned, the GST registration restored, and the petitioner granted the opportunity to file pending returns within a specified timeframe. The court clarified the petitioner's right to apply for cancellation due to business transfer and allowed the respondent to initiate lawful proceedings for statutory non-compliance or dues recovery.