2023 (8) TMI 1122 - HC - GST

GST Registration Cancellation Voided: Lack of Specific Reasons Renders Notice Invalid, Mandates Comprehensive Statutory Review

Singla Exports Versus Central Board Of Indirect Taxes And Customs & Ors.

Singla Exports Versus Central Board Of Indirect Taxes And Customs & Ors. - 2023 (77) G.S.T.L. 206 (Del.) Issues Involved:The issues involved in the judgment are the cancellation of GST registration with retrospective effect, the validity of the Show Cause Notice, rejection of the application for cancellation of GST registration, and the need for specific reasons in the notice.Cancellation of GST Registration:The petitioner challenged the cancellation of their GST Registration with retrospective effect from 02.07.2017. The impugned order was issued based on a Show Cause Notice that did not disclose specific reasons for the proposed cancellation. The court noted that the Show Cause Notice did not specify the provisions allegedly violated by the petitioner, rendering it incapable of eliciting a meaningful response. The impugned order was set aside as it lacked clarity on the statutory violations leading to the cancellation.Validity of Show Cause Notice:The court emphasized that a Show Cause Notice must provide clear reasons for the proposed action to enable the affected party to respond effectively. In this case, the impugned Show Cause Notice failed to indicate the specific grounds for the cancellation of GST Registration, making it inadequate for the petitioner to address the allegations. Consequently, the court held that the impugned Show Cause Notice and the subsequent order could not be sustained and were set aside.Rejection of Application for Cancellation:The petitioner's application for the cancellation of GST Registration with effect from 30.04.2022 was rejected on the grounds of non-response to a notice requesting certain documents and non-appearance for a personal hearing. However, the court observed discrepancies in the rejection order, noting that no notice of personal hearing was communicated to the petitioner. The court deemed the rejection order auto-generated and unsigned, leading to the decision to set it aside and remand the matter for fresh consideration.Need for Specific Reasons in Notice:The court stressed the importance of providing specific reasons in notices related to legal actions, such as the cancellation of registrations. It directed the concerned officer to reconsider the petitioner's application for cancellation, allowing the petitioner to submit additional documents within a specified timeframe and ensuring a fair opportunity for the petitioner to present their case. The judgment concluded by disposing of the petition and the pending application in line with the aforementioned decisions.