GST registration cancellation fails where fraud allegations lack particulars and supporting evidence, requiring restoration.

Cancellation of GST registration on allegations of fraud, wilful misstatement or suppression of facts cannot stand unless the show cause notice sets out the material particulars and the authority supports the charge with proper enquiry and evidence. A vague notice that merely alleges fraud, or relies on shared premises and unverified suspicion of bill trading without examining records such as accounts, e-way bills and transport details, breaches natural justice and undermines the proceedings. The cancellation order and appellate order were set aside, and registration was directed to be restored, with liberty to issue a fresh, lawful notice.

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Issues: Whether the cancellation of GST registration could be sustained when the show cause notice alleged fraud, wilful misstatement or suppression of facts without particulars and the authorities relied mainly on commonality of premises and an unverified suspicion of bill trading.

Analysis: Section 29(2) of the Andhra Pradesh Goods and Services Tax Act, 2017 permits cancellation of registration only on specified grounds, including fraud, wilful misstatement or suppression of facts. A notice invoking such serious grounds must disclose the relevant particulars so that the taxpayer gets a fair opportunity to answer the charge. A vague notice that does not state the nature of the alleged fraud or suppression violates natural justice and weakens the foundation of the cancellation proceedings. The authority also could not treat the mere fact that the petitioner and its parent company operated from the same premises as sufficient proof of fraudulent registration or bill trading, especially without examining relevant records such as accounts, e-way bills and transportation particulars.

Conclusion: The cancellation order and the appellate order were unsustainable and were set aside. The GST registration was directed to be restored, while leaving it open to the authorities to issue a proper notice afresh and proceed according to law.

Ratio Decidendi: Cancellation of GST registration on the ground of fraud, wilful misstatement or suppression of facts cannot stand unless the show cause notice sets out the material particulars and the finding is supported by proper enquiry and evidence.

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