2024 (10) TMI 197 - HC - GST

Cancellation of GST registration based on SCN - petitioner failed to submit his reply to the show cause notice - notice provided only a short/small period of one day to submit his response and for personal appearance - HELD THAT - Perusal of the impugned show cause notice would indicate that except stating that the GST registration of the petitioner had been obtained by fraud, willful misstatement or suppression of fact, necessary particulars, details etc. in this regard are not forthcoming in the impugned show cause notice. Further the show cause notice having been issued on 2.2.2024, the petitioner has been granted extremely a short/small period of time upto only 11.00 a.m. on the very next day i.e., 3.2.2024 to not only submit his reply and also appear for personal hearing in the matter. Under these circumstances, the impugned order at Annexure-E dated 16.2.2024 cancelling GST registration of the petitioner is violative of principles of natural justice warranting interference by this Court in the present petition. A perusal of the impugned order at Annexure-J dated 17.4.2024 rejecting the revocation application submitted by the petitioner will indicate that new grounds and reasons have been assigned for rejecting the revocation application which were not found in the original cancellation order - Under these circumstances, the impugned order Annexure-J dated 17.4.2024 putting forth various grounds which were not forthcoming in the earlier cancellation order would also vitiate the impugned order Annexure-J which deserves to be set aside by reserving liberty in favour of the respondent to issue fresh show cause notice and provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law. The impugned orders at Annexures D, E and J are hereby quashed - Respondent is directed to reinstate/restore GST registration of the petitioner immediately upon the petitioner paying tax and filing returns - Petition allowed.

Summary

Issues:
1. Cancellation of GST registration based on show cause notice
2. Short time period given for response to show cause notice
3. Rejection of revocation application
4. Violation of principles of natural justice

Analysis:
The petitioner sought relief through a writ of certiorari to quash the digitally signed show cause notice and order of cancellation of GST registration issued by the respondents. The petitioner argued that due to being arrested and unable to respond within the short period provided, the cancellation order was unjust. The petitioner later filed an application seeking rejection of the cancellation, but it was rejected. The respondent contended that the petition lacked merit. The court found that the show cause notice lacked specific details and the short response time violated principles of natural justice, leading to the cancellation order being set aside.

Subsequently, the court noted that the rejection of the revocation application contained new grounds not present in the original cancellation order. This discrepancy led to the court quashing the rejection order as well. The judgment allowed the petition, quashed the orders of cancellation and rejection, and directed the respondent to reinstate the GST registration upon compliance with tax payments and return filings. The respondent was granted liberty to issue a fresh show cause notice, ensuring a reasonable opportunity for the petitioner to respond, while proceeding in accordance with the law.