GST Registration Cancellation Overturned: Authorities Must Provide Precise Evidence of Fraud or Misstatement Under Rule 21

HC found the show cause notice for GST registration cancellation legally deficient, lacking specific details of alleged fraud or misstatement. The court set aside the cancellation order, directing immediate restoration of registration while preserving tax authorities' right to take future action if non-compliance is proven.

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Issues involved:
The cancellation of GST registration u/s 29(2)(e) for alleged fraud, wilful misstatement, or suppression of facts without specific details in the show cause notice (SCN).

Impugned Order and SCN:
The petitioner challenged the order cancelling their GST registration dated 19.07.2023 based on the SCN issued on 05.07.2023, which cited u/s 29(2)(e) for registration obtained through fraud, wilful misstatement, or suppression of facts. The SCN lacked specific reasons for the proposed cancellation, failing to meet the standard of enabling a meaningful response.

Judgment:
The High Court found that the SCN did not specify the alleged fraud, misstatement, or suppressed facts by the petitioner, rendering it insufficient for a proper response. The impugned order, which lacked reasons and merely referenced the SCN, was set aside. The retrospective cancellation of registration from 23.05.2023 without justification was deemed unjust.

Relief Granted:
The Court allowed the petition, setting aside both the SCN and the impugned order. The respondent was directed to immediately restore the petitioner's GST registration. However, it was clarified that this restoration did not prevent the respondent from taking action if the petitioner was found non-compliant or violating any laws. The petition was disposed of accordingly.

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