GST Registration Cancellation Overturned After Procedural Violations Compromise Natural Justice and Proper Hearing Rights

HC found the GST registration cancellation order invalid due to procedural defects. The show cause notice and subsequent order lacked substantive reasoning, violated natural justice principles, and did not provide the petitioner an opportunity to be heard. The court set aside the notice and order, directing immediate restoration of GST registration while allowing potential future proceedings against the petitioner.

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Issues:
The judgment involves the cancellation of GST registration based on a show cause notice and subsequent order lacking reasons and violating principles of natural justice.

Cancellation of GST Registration:
The petitioner challenged the show cause notice proposing the cancellation of GST registration, citing a letter regarding fraudulent purchase from DGGI. The petitioner's registration was suspended from the date of the notice and later cancelled with retrospective effect from 01.07.2017. However, the order did not provide any reasons for the cancellation, leaving the space blank and failing to disclose details of the alleged fraudulent purchase. The notice did not specify a date or time for the personal hearing, depriving the petitioner of an opportunity to be heard. The court found the show cause notice deficient as it did not clearly set out the allegations, and the order was passed in violation of principles of natural justice.

Lack of Reasons in the Order:
The impugned order cancelling the GST registration was found to be deficient as it did not contain any reasons for the cancellation. Despite the retrospective effect of the cancellation, neither the show cause notice nor the order provided any explanation for this decision. The court held that the order lacked justification and failed to inform the petitioner of the grounds for cancelling the registration.

Setting Aside the Impugned Notice and Order:
In light of the deficiencies in the show cause notice and the order, the court set aside both the notice dated 29.10.2021 and the order dated 16.12.2021. The petitioner's GST registration was directed to be restored immediately. The judgment clarified that this restoration did not prevent the respondent from initiating fresh proceedings against the petitioner in accordance with the law. Additionally, all GST Central authorities were instructed to ensure compliance with the court's order. The petition was disposed of in the aforementioned terms, providing relief to the petitioner and emphasizing the importance of procedural fairness in such matters.

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