GST registration cancellation set aside due to improper service and violation of natural justice principles

Madras HC allowed petition challenging GST registration cancellation. Petitioner's GST registration was cancelled due to failure to file returns, caused by consultant's fault. Revenue authorities served show cause notice and orders only through e-Portal after cancellation, not through physical mode. Court found this violated natural justice principles since petitioner's portal access was already closed. Despite petitioner's failure to respond, authorities should have provided proper service and hearing opportunity. HC set aside impugned orders and remanded matter to respondent for reconsideration with fresh opportunity for petitioner to present case.

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Issues:
The challenge in both the Writ Petitions is to the orders passed by the respondent dated 15.12.2021 and to quash the same.

Details of the Judgment:

Issue 1: Non-filing of GST returns leading to cancellation of GST registration and subsequent orders:
The petitioner, a registered dealer under the Tamil Nadu General Sales Tax Act, 2017, had their GST registration cancelled due to the failure of their Consultant to file returns without informing the petitioner. The respondent confirmed the demand made in the show cause notices without hearing the petitioner, which led to the petitioner being unaware of the proceedings until receiving a property attachment notice.

Issue 2: Violation of principles of natural justice and mode of service:
The petitioner argued that the respondent did not serve the show cause notice directly through physical mode after the cancellation of GST registration, which prevented the petitioner from being aware of the proceedings. The Court acknowledged that all communications were uploaded in the GST Portal, inaccessible to the petitioner due to the cancellation of registration, indicating a violation of natural justice principles.

Judgment:
The Court found the impugned orders to be in violation of natural justice and set them aside. The matters were remanded to the respondent for re-consideration, directing the respondent to grant the petitioner sufficient time to file a reply, fix a date for a personal hearing, and consider any documents provided by the petitioner. The Court emphasized the importance of providing the petitioner with an opportunity to present their case fully. Consequently, the property attachment notices and other consequential proceedings were also set aside.

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