2024 (10) TMI 1302 - HC - GST

Cancellation of GST registration of petitioner with retrospective effect - attachment of petitioner no. 1 s premises - lack of opportunity for the petitioner to respond and be heard before the cancellation - violation of principles of natural justice - HELD THAT - It is seen that the impugned SCN does not propose the cancellation of petitioner no. 1 s GST registration with retrospective effect from 01.07.2017. Plainly, if it is the respondents contention that petitioner no. 1 s principal place of business has been attached by the secured lenders under the SARFAESI Act, on 14.03.2023, the same cannot lead to the conclusion that petitioner no. 1 did not carry on its business from the said premises since inception. It is also relevant to note that although the impugned SCN called upon the petitioner to appear for personal hearing before the proper officer, however, no date or time was fixed for personal hearing. Thus, in effect, the petitioners were also not afforded an opportunity of being heard. The impugned order is set aside as it has been passed in violation of the principles of natural justice. Clearly, petitioner no. 1 had no opportunity to respond as to why its registration be not cancelled from a retrospective date - petition disposed off.

Summary

Issues:
Impugning the cancellation of Goods and Services Tax (GST) registration with retrospective effect from 01.07.2017 based on a Show Cause Notice (SCN) citing the principal place of business not being found during a field visit. Lack of opportunity for the petitioner to respond and be heard before the cancellation.

Analysis:

1. The petitioners challenged the cancellation of GST registration with retrospective effect from 01.07.2017, based on an impugned order issued on 31.03.2023 following an SCN dated 14.03.2023. The impugned SCN cited the reason for cancellation as the principal place of business not being found during a field visit.

2. The respondents argued that the petitioner's principal place of business was attached by secured lenders under the SARFAESI Act, indicating that the business was not being conducted from the said premises. However, the petitioners contended that the premises were attached on the same day the impugned SCN was issued, and it does not imply that the business was not operated from there since inception.

3. The High Court noted that the impugned SCN did not propose retrospective cancellation from 01.07.2017. Additionally, the lack of fixing a date or time for a personal hearing deprived the petitioners of the opportunity to be heard, violating principles of natural justice.

4. Consequently, the High Court set aside the impugned order due to the violation of natural justice principles. The petitioners were granted two weeks to respond to the SCN, and the proper officer was instructed to consider the response and pass a reasoned order after providing an opportunity for a hearing.

5. The petitioners were also allowed to file an application for a change of principal place of business, with assurance that the application would be considered on its merits despite the suspension of GST registration from 14.03.2023. The petition was disposed of accordingly, and any pending application was also resolved.