2023 (5) TMI 75 - HC - GST

Tax Authority Violated Natural Justice by Cancelling GST Registration Without Proper Hearing, Order Quashed and Fresh Proceedings Directed

Pakiza Steel LLP Versus Union of India & Ors.

HC found that the tax authority failed to provide proper opportunity to the petitioner before cancelling GST registration. The impugned order was quashed, ... Cancellation of GST registration of petitioner - without considering the reply, the final order (impugned order) came to be passed - principles of natural justice - HELD THAT:- The Petitioner should be given an opportunity before the final order of cancellation of registration is made. However, we do not intend to restore registration till the final order is passed and would continue suspension as per show cause notice. The impugned order dated 15 September 2022 is quashed and set aside. The show cause notice dated 5 September 2022 stands restored to the file of Respondent No. 2 along with directions for suspension of registration - petition disposed off. Issues Involved:The Petitioner challenged the order of cancellation of registration u/s 15 of the GST Act.Judgment Summary:Issue 1: Opportunity to RespondentThe Petitioner, engaged in trading of iron and scrap, received a show cause notice regarding the cancellation of registration. The Petitioner submitted a reply, but the final order was passed without considering it. The Court held that the Petitioner should be given an opportunity before the final order of cancellation is made, maintaining the suspension as per the show cause notice.Issue 2: Quashing of Impugned OrderThe impugned order of 15 September 2022 was quashed and set aside by the Court. The show cause notice dated 5 September 2022 was restored to the Respondent for further proceedings, including the suspension of registration.Issue 3: Further ProceedingsThe Court directed the Petitioner to appear before the Respondent on 10 May 2023 for a hearing. The Respondent was instructed to provide a suitable date for the hearing, allowing the Petitioner to file a reply affidavit. The Respondent was required to pass a final order within two weeks.Issue 4: Prima Facie OpinionThe observations in the impugned order and the reply affidavit were to be considered as the prima facie opinion of the Respondent authority, as per the Court's directions.Issue 5: Bank Account AttachmentRegarding the attachment of the bank account, the Court mentioned that the Petitioner could seek remedy under Rule 159(5) of the CGST Rules 2017, eliminating the need for a separate order on this matter.The Writ Petition was disposed of in accordance with the above decisions.