2022 (12) TMI 406 - HC - GST

Writ Petition Succeeds: CGST Registration Cancellation Quashed for Procedural Defect in Mandatory Show Cause Notice

The HC allowed the writ petition challenging registration cancellation under CGST/SGST Act due to procedural irregularities. The court quashed the ... Cancellation of registration - Show cause notice in Form REG-17 - Suspension of registration in Form REG-31 - Quashing and remand for fresh consideration - Restoration of registration pending fresh decisionShow cause notice in Form REG-17 - Cancellation of registration - Suspension of registration in Form REG-31 - Ext.P4 cancellation order quashed for failure to issue the statutory show cause notice in Form REG-17 and matter remitted for fresh consideration; registration restored pending fresh decision. - HELD THAT: - The Court found that the petitioner was entitled to a show cause notice in Form REG-17 before cancellation under the scheme of Section 29 read with Rule 22 of the CGST/SGST Rules. The Senior Government Pleader conceded that no Form REG-17 notice was issued and only a notice of suspension in Form REG-31 had been served. In view of the admitted absence of the statutory show cause notice, the Court quashed Ext.P4 and remitted the matter to the 1st respondent to complete the proceedings in accordance with law. As a consequential and interim measure, the registration canceled by Ext.P4 was directed to stand restored until the 1st respondent takes a fresh decision. The Court clarified that quashing of Ext.P4 does not preclude the 1st respondent from initiating or continuing cancellation proceedings lawfully.Ext.P4 quashed; matter remitted for fresh consideration in accordance with law; registration restored until fresh decision.Final Conclusion: Writ petition allowed; impugned cancellation set aside for failure to issue the requisite show cause notice in Form REG-17, matter remitted for reconsideration and registration restored interimly until a lawful decision is taken. Issues: Challenge to registration cancellation under CGST/SGST Act without proper notice.In this judgment, the petitioner challenged the cancellation of their registration under the provisions of the CGST/SGST Act without receiving a show cause notice as required by Section 29 read with Rule 22. The petitioner contended that they were entitled to a show cause notice in Form REG-17 before the cancellation of registration, but only received a notice regarding the suspension of registration in Form REG-31. The court noted that the show cause notice in Form REG-17 was not issued to the petitioner, which the Senior Government Pleader admitted. The court allowed the writ petition, quashed the cancellation order (Ext.P4), and remitted the matter to the 1st respondent for further consideration in compliance with the law.The court emphasized the importance of following due process and legal requirements in cancellation proceedings under the CGST/SGST Act. Despite the absence of the requisite show cause notice in Form REG-17, the court acknowledged the submission made by the Senior Government Pleader that the necessary notice should have been automatically generated. However, the court decided not to focus on technicalities and instead directed the 1st respondent to reconsider the case of the petitioner in line with the law. As a consequence of the judgment, the registration of the petitioner, which was canceled by Ext.P4 order, was restored until a fresh decision was taken by the 1st respondent. Importantly, the court clarified that the quashing of Ext.P4 did not prevent the 1st respondent from initiating or continuing proceedings for the cancellation of registration against the petitioner, as long as it was done in accordance with the law.