GST Registration Cancellation Notice Requires Fair Hearing and Timely Decision Under Natural Justice Principles

The HC addressed a GST registration cancellation notice, directing the tax authority to provide the petitioner a four-week period to file a reply and receive a personal hearing. The court emphasized natural justice principles, mandating the authority to render a decision within four weeks after the hearing. The petition was disposed of, focusing on procedural fairness rather than substantive merits of the case.

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Issues involved:
The issues involved in the judgment are the challenge to the vires of subrule (2) and (2A) of Rule 21A of CGST/GGST Rules, 2017 and the nature and consequences of the impugned notice for cancellation of GST registration.

Challenge to Vires of Rule:
The petitioner initially sought an appropriate writ/order/direction challenging the vires of subrule (2) and (2A) of Rule 21A of CGST/GGST Rules, but later gave up this prayer. Consequently, the only prayer remaining was to set aside the show-cause notice dated 06.12.2022 for cancellation of registration in Form GST REG-31.

Nature of Impugned Notice:
The petitioner, a proprietary firm engaged in the supply of carbonates sodium hydroxide, received a notice from the Commissioner of State Tax, Ahmedabad, stating that its registration was liable to be cancelled due to issues with returns filed under section 39 of the Central Goods and Services Tax Act, 2017. With the challenge to the vires of the Rule abandoned, the focus of the petition shifted to the nature and consequences of the cancellation notice.

Court Directions:
The Court emphasized the importance of natural justice in the adjudication process following the issuance of a show-cause notice for cancellation of GST registration. It directed that the petitioner be given four weeks to file a reply and a personal hearing, with the authority required to make a decision within four weeks thereafter. Notably, the Court refrained from delving into the merits of either party's arguments, instead focusing on ensuring due process in the proceedings.

Disposition:
The petition was disposed of with the aforementioned directions in place, emphasizing the need for fair adjudication and providing the petitioner with an opportunity to present their case effectively before a decision on the cancellation of GST registration is made.

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