GST Registration Cancellation Overturned: No Personal Hearing on Holiday Violates Natural Justice Principles, Registration Restored

GST registration cancellation order set aside by SC due to violation of natural justice principles. Court found that no personal hearing was granted on the scheduled date (national holiday), rendering the cancellation order invalid. Directed immediate restoration of registration, while preserving respondents' right to take lawful future actions against the petitioner.

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Issues:
Challenge to order-in-appeal rejecting appeal against revocation of GST registration on the ground of limitation.

Analysis:
The petitioner challenged the order-in-appeal dated 24.01.2023, which rejected the appeal against the revocation of GST registration due to being beyond the limitation period. The cancellation of the registration was based on the petitioner's failure to file returns for six months. A show cause notice was issued on 02.09.2021, requiring the petitioner to justify why the registration should not be cancelled and to appear before the officer on 02.10.2021. The petitioner responded promptly by filing the returns by 14.09.2021, believing that addressing the cause would prevent adverse action. Despite this, the registration was cancelled on 15.02.2022 without affording a personal hearing as 02.10.2021 was a national holiday.

Analysis:
The Court found that the order of 15.02.2022 cancelling the registration was in violation of natural justice principles as no personal hearing was granted due to the holiday. The respondent argued that the petitioner must also pay outstanding interest to regularize the account with GST authorities. A notice was issued to pay a specific amount, which the petitioner attempted but faced portal limitations on payment amounts. The petitioner had excess input tax credit that could cover outstanding dues. The Court limited the scope of the petition to the registration cancellation issue, not delving into other defaults or opportunities for rectification. Since the cancellation order violated natural justice principles, it was set aside, directing the restoration of the GST registration immediately.

Analysis:
The judgment allowed the petition, setting aside the impugned order of 15.02.2022 and instructing the respondents to restore the petitioner's GST registration promptly. It was clarified that this decision did not prevent the respondents from taking further actions, provided they were in accordance with the law.

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