Cancellation of GST registration for procedural defects in show-cause notice set aside after natural justice and hearing deficiencies identified

Cancellation of GST registration was set aside due to procedural defects: the impugned notice was non-speaking and failed to specify factual allegations necessary for a valid show-cause notice, thereby violating the principles of natural justice; consequence: the cancellation could not stand. The notice also denied a real opportunity to be heard by fixing the hearing on the next day, undermining opportunity to reply; consequence: procedural unfairness invalidated the action. Given these fundamental defects, the bar of the statutory alternate remedy was treated as waived in the peculiar facts, permitting relief despite delay concerns.

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Issues involved:
The cancellation of registration under the Central Goods and Services Tax Act, 2017

Summary:

Challenge to Order:
The petitioner challenged the order cancelling their registration under the Central Goods and Services Tax Act, 2017, issued by the Superintendent, Sector-1, Range-4, CGST Commissionerate, Gautam Budh Nagar.

Preliminary Objection:
The respondent raised a preliminary objection regarding the maintainability of the writ petition, citing the petitioner's statutory alternative remedy of appeal. However, the objection was not sustained due to the specific facts of the case.

Cancellation Process:
The petitioner's registration was originally granted and later a show-cause notice was issued for cancellation, citing non-compliance with specified provisions. The registration was suspended, and despite the petitioner's contention of not receiving the notice, the registration was retrospectively cancelled for non-existence of the principal place of business.

Procedural Defects:
Fundamental defects in the procedure were identified, including the non-speaking nature of the initial notice, lack of a real opportunity for a hearing, failure to communicate a fresh hearing date, and the discrepancy between the reason for cancellation and the issues raised in the show-cause notice.

Judgment and Relief:
Given the procedural errors, the court waived the bar of statutory alternative remedy of appeal and directed the respondent to treat the impugned order as a show-cause notice. The petitioner was granted two weeks to respond, after which a proper hearing date should be fixed. The court emphasized the importance of natural justice and ordered that the rights of the parties would be determined based on the new order to be passed by the respondent.

Conclusion:
The writ petition was disposed of with no costs awarded, allowing the petitioner an opportunity to respond to the cancellation order under proper procedural safeguards.

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