GST registration cancellation notice must give clear reasons; cryptic notice was set aside and registration restored.

A show cause notice proposing cancellation of GST registration must disclose clear and sufficient reasons so the noticee can make an effective response. Here, the notice contained only a cryptic ground and did not provide intelligible basis for the proposed adverse action, leaving the petitioner without a meaningful opportunity to answer the cancellation proposal. The Delhi High Court set aside the notice and restored the GST registration, while permitting the respondent to issue a fresh notice with proper reasons and to afford a full opportunity before passing any adverse order.

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Issues: Whether the show cause notice proposing cancellation of GST registration was valid, and whether the petitioner was entitled to restoration of its registration.

Analysis: The notice stated only a cryptic ground and did not disclose intelligible or sufficient reasons for the proposed adverse action. A show cause notice proposing cancellation of registration must clearly set out the basis of the proposed action so that the noticee can respond effectively. On the facts, the petitioner was left without a meaningful opportunity to answer the proposed cancellation.

Conclusion: The show cause notice was unsustainable and was set aside. The petitioner's GST registration was restored, with liberty to the respondent to issue a fresh notice setting out proper reasons and to afford a full opportunity before any adverse order.

Final Conclusion: The petition succeeded, and the impugned cancellation process was annulled while preserving the respondent's right to proceed afresh in accordance with law.

Ratio Decidendi: A show cause notice proposing cancellation of GST registration must disclose clear and sufficient reasons for the proposed action, failing which it is liable to be set aside for want of a meaningful opportunity to respond.

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