GST cancellation quashed for vague notice and lack of proper hearing under Section 29(2) proviso

The HC set aside the cancellation of GST registration and the notice issued to the petitioner, finding the notice vague and non-compliant with natural justice principles. The notice lacked the name and designation of the signatory and scheduled a hearing on a date later declared a holiday, without issuing any subsequent notice. The court held that cancellation under Section 29(2) proviso requires a proper opportunity of hearing, which was not provided. Consequently, the impugned order dated 23.08.2022 and the notice dated 06.08.2022 were quashed, and the petition was allowed.

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Issues Involved:
The challenge to a show cause notice for cancellation of GST Registration and the subsequent cancellation order.

Details of Judgment:

Issue 1: Vagueness of Notice and Lack of Opportunity for Hearing
The petitioner's GST registration was cancelled without being given an opportunity of hearing. The notice issued was vague, not specifying whom the petitioner should meet or providing an alternative date for appearance. The respondent claimed attempts were made to contact the petitioner for inspection, but the petitioner was unreachable.

Issue 2: Violation of Provisions of the Act
The petitioner argued a violation of Rule 25 of The Central Goods and Services Tax Rules, 2017, which requires physical verification in the presence of the person. The respondent failed to upload the inspection report as mandated. Section 29(2) of the Act mandates an opportunity of hearing before cancellation, which was not provided in this case.

Issue 3: Contradictory Statements in the Impugned Order
The impugned order stated contradictory information regarding the petitioner's reply to the show cause notice, indicating a lack of clarity and procedural errors in the cancellation process.

Key Legal References:
- Rule 25 mandates physical verification in the presence of the person.
- Section 29(2) requires an opportunity of hearing before registration cancellation.
- Section 169 outlines methods of serving notices under the Act.

Court Decision:
The High Court found the cancellation order and show cause notice to be non-compliant with the law due to lack of opportunity for hearing and procedural irregularities. Both the cancellation order and the show cause notice were quashed, and the writ petition was allowed.

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