GST Registration Cancellation Overturned: Authorities Must Provide Specific Reasoning and Clear Grounds for Allegations

HC found the GST registration cancellation order invalid due to lack of specific reasoning. The show cause notice failed to substantiate allegations of fraud or misstatement. Without clear grounds communicated to the petitioner, the court set aside the cancellation order and directed authorities to reconsider the matter with proper justification.

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Issues Involved:
The judgment involves the cancellation of GST registration u/s 29(2)(e) on grounds of fraud, wilful misstatement, or suppression of facts without providing specific reasons for cancellation.

Impugned Show Cause Notice (SCN) and Order:
The petitioner challenged the show cause notice dated 30.06.2023 and the subsequent order dated 08.08.2023 cancelling the GST registration effective from 20.07.2022. The impugned order did not provide any clear reasons for the cancellation of registration.

Petitioner's Position:
The petitioner, an individual carrying on business under a sole proprietorship concern, contested the cancellation of GST registration. The petitioner requested an address update and had previously faced cancellation of registration, which was later revoked. Despite restoration, a new SCN was issued followed by another cancellation.

Judicial Findings:
The court noted that the impugned order lacked reasoning and failed to specify the grounds for cancellation. The SCN did not provide specific details regarding the alleged fraud, wilful misstatement, or suppression of facts by the petitioner, making it impossible for the petitioner to respond meaningfully. As a result, the court set aside both the impugned order and the SCN due to lack of clarity and reasoning.

Conclusion:
The court allowed the petition, setting aside the impugned order and SCN. The petitioner's GST registration cancellation was deemed invalid due to the absence of clear reasons provided by the authorities.

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