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GST Registration Cancellation Overturned: Procedural Defects Invalidate Demands, Case Remitted for Fresh Adjudication with Personal Hearing HC found the GST demands and registration cancellation orders invalid due to lack of proper service of Show Cause Notices. The court remitted the matter ...
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GST Registration Cancellation Overturned: Procedural Defects Invalidate Demands, Case Remitted for Fresh Adjudication with Personal Hearing
HC found the GST demands and registration cancellation orders invalid due to lack of proper service of Show Cause Notices. The court remitted the matter for re-adjudication, directing the petitioner to file a reply within two weeks and ensuring a fresh speaking order after personal hearing. The original orders were set aside, with all parties' rights and contentions reserved.
Issues involved: The issues involved in this case are the impugned Show Cause Notices leading to demands raised against the petitioner, cancellation of GST registration, lack of knowledge about Show Cause Notices, and the validity of the impugned orders passed under Section 73 of the Central Goods and Services Tax Act, 2017.
Impugned Show Cause Notices and Demands: The petitioner challenged the order disposing of Show Cause Notices dated 20.09.2023 and 29.09.2023, which proposed demands of Rs. 18,04,132.00 and Rs. 1,43,59,445.00 respectively, including penalties. The impugned orders were passed under Section 73 of the Act. The petitioner argued that they had closed all business activities during the Covid-19 pandemic and had no knowledge of these Show Cause Notices as they were not served directly but uploaded on a common portal. The Department had raised demands based on various grounds related to tax defaults and non-filing of returns.
Cancellation of GST Registration: The petitioner's GST registration was cancelled retrospectively from 01.08.2020 due to non-filing of returns for a continuous period of six months, as per a Show Cause Notice dated 25.08.2020. The petitioner contended that the retrospective cancellation was unjust as they were unaware of the Show Cause Notices and the cancellation was a consequence of not checking the portal after the retrospective cancellation.
Validity of Impugned Orders: The impugned orders dated 04.12.2023 were challenged on the grounds that they were passed ex-parte due to the petitioner's failure to reply, which the petitioner attributed to not being able to access the Show Cause Notices. The Court found that the orders solely based on the petitioner's non-reply were not sustainable. The matter was remitted to the Proper Officer for re-adjudication, directing the petitioner to file a reply within two weeks and ensuring a fresh speaking order after a personal hearing.
Conclusion: The Court set aside the impugned orders and remitted the matter for re-adjudication, emphasizing the importance of giving the petitioner an opportunity to respond. The Court clarified that it did not delve into the merits of the case and reserved all rights and contentions of the parties. Additionally, the challenge to Notification No. 9 of 2023 regarding the initial extension of time was left open, and the petition was disposed of accordingly.
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