2024 (1) TMI 622 - HC - GST

GST Registration Cancellation Overturned: Procedural Flaws Invalidate Order, Petitioner Granted Fair Hearing Rights Under Law

HC allowed writ petition challenging GST registration cancellation. Court found procedural irregularities in cancellation process, quashed the order, and ... Violation of principles of natural justice - Cancellation of registration of petitioner - whether the petitioner was provided a reasonable opportunity before the drastic order of cancellation of registration was issued? - HELD THAT:- From the show cause notice, it appears that such notice was digitally signed by the Goods and Services Tax Network. When the said show cause notice is read with the impugned order, it is quite evident that the whole process has been undertaken mechanically. As pointed out by learned counsel for the petitioner, lines 1 and 2 of the impugned order are undoubtedly contradictory. Since such impugned order has resulted in great prejudice to the petitioner without the petitioner being provided a reasonable opportunity to respond, the impugned order calls for interference. The order dated 23.01.2023 cancelling the petitioner's GST registration is quashed - Petition allowed. Issues involved: Cancellation of GST registration without providing a reasonable opportunity to respond.Summary:The petitioner challenges the cancellation of their GST registration, stating that they had filed monthly returns regularly until March 2022, but faced a period of no outward supply due to the Covid-19 pandemic. The petitioner was not aware of the show cause notice uploaded on the GST portal, leading to the cancellation of registration without a proper response. The petitioner seeks relief similar to a judgment by the Bombay High Court in a similar case.The respondent justifies the cancellation of registration u/s 29(2)(b) and (c) of the GST Provisions, arguing against any interference.The key question is whether the petitioner was given a reasonable opportunity before the cancellation. The court finds discrepancies in the process, noting that the cancellation order was issued mechanically without proper consideration. Referring to the Bombay High Court judgment in Ahmed Enterprises, the court decides to quash the cancellation order and restore the registration, directing the respondent to issue a fresh show cause notice and proceed in accordance with the law.In conclusion, the court allows the writ petition, quashes the cancellation order, directs the restoration of GST registration, and instructs the respondent to issue a fresh show cause notice within fifteen days, considering Rule 22 of the CGST Rules. No costs are awarded, and related petitions are closed.