GST registration cancellation order quashed for violating natural justice principles and lacking proper hearing opportunity

Gujarat HC allowed writ petition challenging GST registration cancellation. The court found the cancellation order violated natural justice principles as it was non-speaking, cryptic, and lacked basic details. Despite petitioner's request for adjournment, respondent authority failed to provide adequate hearing opportunity. The authority's explanation of technical portal glitches was deemed invalid for issuing vague show cause notices and final orders. HC directed manual issuance of notices with complete particulars until technical issues are resolved. The court criticized the officer's failure to follow previous court directions and lack of remorse for repeated violations.

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Issues Involved:
1. Legality of the order dated 10.05.2022 canceling the petitioner's GST number.
2. Compliance with principles of natural justice in the issuance of show cause notices and final orders.
3. Technical glitches in the GST portal affecting the due process.
4. Adequacy of reasons provided in the show cause notices and final orders.
5. Remedies and directions to prevent recurrence of similar issues.

Issue-wise Detailed Analysis:

1. Legality of the Order Dated 10.05.2022:
The petitioner challenged the order dated 10.05.2022, issued by the Assistant Commissioner, Ghatak-8, Ahmedabad, canceling the GST number. The petitioner argued that the order was non-speaking and lacked sufficient reasoning, violating the principles of natural justice. The High Court found that the order was indeed non-speaking and cryptic, lacking any specific details or reasons for cancellation, which rendered it illegal and bad in law.

2. Compliance with Principles of Natural Justice:
The Court emphasized that the respondent authority failed to provide a reasonable opportunity of hearing before passing the impugned order. The show cause notices and final orders were devoid of necessary particulars and details, making it impossible for the petitioner to effectively respond. The Court noted that similar issues were addressed in the case of Aggarwal Dyeing and Printing Works vs. State of Gujarat, where the lack of specific details in show cause notices and cryptic final orders were held to violate natural justice principles.

3. Technical Glitches in the GST Portal:
The respondent argued that technical glitches in the GST portal prevented them from receiving the petitioner's reply to the show cause notice. The Court did not accept this as a valid ground for issuing vague notices and passing non-speaking orders. It directed that until the technical glitches are resolved, show cause notices and final orders must be issued manually, containing all necessary details and forwarded by RPAD.

4. Adequacy of Reasons Provided in the Show Cause Notices and Final Orders:
The Court found that the show cause notices and final orders were vague and lacked material particulars. The impugned order dated 10.05.2022 did not provide any reasoning or reference to relevant provisions or rules, making it a complete non-application of mind. The Court highlighted that the respondent authority must ensure that all necessary details and reasons are included in such notices and orders to avoid unnecessary litigation.

5. Remedies and Directions to Prevent Recurrence of Similar Issues:
The Court quashed the impugned show cause notice and order, restoring the petitioner's GST registration. It granted liberty to the respondent to issue a fresh show cause notice with specific reasons and details, providing a reasonable opportunity of hearing to the petitioner. The Court emphasized that the respondent must issue manual notices and orders until the GST portal is updated to address technical glitches. Additionally, the Court imposed a cost of Rs. 25,000 on the department for failing to comply with the Court's previous directions and causing unnecessary litigation.

Conclusion:
The High Court allowed the petition, quashing the impugned show cause notice and order due to violations of natural justice and lack of adequate reasoning. It directed the respondent to issue fresh, detailed notices and orders manually until the GST portal is updated. The Court also imposed a cost on the department for non-compliance with previous judicial directions.

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