Procedural Flaws Invalidate GST Registration Cancellation, Restores Taxpayer Rights with Potential Tax Recovery Provisions

The HC found multiple procedural irregularities in GST registration cancellation. The Show Cause Notice lacked proper officer details and reasoning. The court set aside the cancellation and revocation rejection orders, restoring the petitioner's GST registration while permitting tax recovery measures by authorities if required.

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Issues involved:
The cancellation of GST registration of the petitioner and the subsequent rejection of the application seeking revocation.

Cancellation of GST Registration:
The petitioner, engaged in manufacturing safety critical products, challenged the cancellation of GST registration. The cancellation was based on a Show Cause Notice citing grounds of non-appearance during physical verification and non-receipt of a reply. However, the cancellation order was found to be flawed as it did not specify the officer's name issuing the notice and the grounds for cancellation were different from those in the Show Cause Notice. The Court emphasized that registration cannot be cancelled retrospectively without objective criteria and proper reasoning.

Revocation Application Rejection:
After filing for revocation, the petitioner received a defective Show Cause Notice lacking officer details. Despite submitting a reply, the revocation application was rejected on the grounds of non-submission of reply. The Court noted discrepancies in the officer's consideration of the petitioner's responses and highlighted the lack of proper application of mind in the decision-making process.

Judgment:
The Court found multiple infirmities in the cancellation and rejection processes, leading to the conclusion that both the Show Cause Notices and subsequent orders were unsustainable. Consequently, the Court set aside the Show Cause Notices, cancellation order, and revocation rejection order, thereby restoring the petitioner's GST registration. The petitioner was directed to comply with relevant GST Rules, and the respondents were permitted to take lawful steps for tax recovery if necessary.

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