GST Registration Cancellation Overturned: Pandemic Hardship Recognized, Natural Justice Principles Upheld for Business Continuity

Petitioner challenged GST registration cancellation due to no outward supplies during pandemic. HC found cancellation was mechanical and violated principles of natural justice. Court quashed the cancellation order, directed restoration of GST registration, and allowed respondent to issue a fresh show cause notice in compliance with legal procedures.

---

---

Issues involved:
Cancellation of GST registration u/s 29(2)(b) and (c) of GST Provisions without providing a reasonable opportunity to the petitioner.

Summary:
The petitioner challenged the cancellation of their GST registration, stating that they were not informed about the show cause notice uploaded on the GST portal, resulting in the inability to respond. The petitioner's business was adversely affected during the pandemic, leading to a period of no outward supplies. The impugned order of cancellation was found to be issued mechanically, without allowing the petitioner a fair chance to present their case. The petitioner cited a judgment from the Bombay High Court where a similar cancellation was quashed and registration restored.

The respondent argued that the cancellation was done as per the provisions of Section 29(2)(b) and (c) of GST laws, hence no interference was warranted. The court examined whether the petitioner was given a reasonable opportunity before the registration cancellation. It was observed that the process was conducted mechanically, causing prejudice to the petitioner. Referring to the Bombay High Court judgment, the court decided to quash the cancellation order and directed the restoration of the petitioner's GST registration.

In the final order, the court allowed the writ petition, quashed the cancellation order, and directed the immediate restoration of the GST registration. The respondent was given the option to issue a fresh show cause notice and proceed in accordance with the law, considering sub-rule 4 of Rule 22 of the CGST Rules. No costs were awarded, and the related motions were closed.

---