2021 (9) TMI 53 - HC - GST

Court protects taxpayer rights, emphasizes natural justice in tax matters

OPC Assets Solutions Pvt. Ltd., Versus The State Of Tripura, The Chief Commissioner Of State Tax, Tripura Goods & Service Tax Department, The Superintendent Of State Tax, Sales Tax Officer, Tripura

The Court set aside the order canceling the petitioner's registration under the Tripura Goods and Services Tax Act and Central Goods and Services Tax Act, ... Cancellation of petitioner's registration - Scope and validly of SCN issued for cancellation of GST registration - non compliance of specified provisions in the GST Act or the Rules made thereunder - HELD THAT:- he entire purpose of issuance of show-cause notice frustrated because the Superintendent of Taxes merely forwarded a printed blank format of a show-cause notice to the petitioner asking the petitioner to meet with non-existent and non-disclosed grounds. - If such a show-cause notice does not specify the grounds on the basis of which the Superintendent desired to proceed further, the same would fail the test of minimum requirement of principles of natural justice and the statutory requirement for issuance of show-cause notice. The grounds stated in the supporting order are totally unacceptable. The Superintendent has passed a rather long order, going into range of legal issues not related to the case on hand. The impugned order of cancellation of the petitioner’s registration is set aside. Consequently, the demand confirmed under order dated 23.04.2021 on the ground that the petitioner’s registration has been cancelled is set aside - petition allowed. Issues:Challenge to order cancelling registration under Tripura Goods and Services Tax Act and Central Goods and Services Tax Act.Analysis:The petitioner, a company providing goods on rental basis, challenged an order cancelling its registration under Tripura Goods and Services Tax Act and Central Goods and Services Tax Act. The petitioner had registered under CGST and State GST Acts and entered into rental agreements with customers, purchasing goods for renting purposes. The Superintendent of Taxes issued a show-cause notice on 06.12.2020 for non-compliance, leading to the cancellation of registration effective from 01.07.2017. The petitioner responded, highlighting compliance with tax payments and filing returns. Despite the petitioner's cooperation and submissions, the Superintendent of Taxes passed the impugned order on 23.04.2021, canceling registration and imposing tax liabilities.The Superintendent's order lacked specific grounds for cancellation, merely citing non-compliance without detailing the provisions or breaches leading to cancellation. The Court emphasized the importance of natural justice in issuing show-cause notices, requiring clear grounds for the noticee to respond adequately. Referring to a similar case, the Court highlighted the necessity of specifying reasons for cancellation, ensuring a fair hearing and preventing arbitrary actions. The Superintendent's order was criticized for delving into irrelevant legal issues, exceeding the scope of the case, and lacking clarity in reasoning and conclusions.The Court set aside the impugned order dated 23.04.2021, canceling the petitioner's registration, and the associated tax demands. It emphasized the need for proper assessment and adherence to natural justice principles in future proceedings. The judgment allowed the petitioner's challenge, disposing of the petition and any pending applications. The Court's decision protected the petitioner's right to a fair process and highlighted the Superintendent's obligation to provide clear grounds for cancellation and adhere to legal principles in tax-related matters.