GST registration cancellation quashed for violating natural justice principles and denying adequate hearing opportunity

HC quashed GST registration cancellation order due to violation of natural justice principles. Authority failed to provide copy of DGGI letter dated 16.03.2024 to petitioner along with show cause notice, denying adequate opportunity of hearing. Petitioner could not effectively defend against allegations without knowing specific inquiry points and findings. Assistant Commissioner acted on directions from higher-ranked Additional Commissioner, creating jurisdictional irregularities. Court held cancellation orders dated 04.04.2024 and 03.05.2024 unsustainable in law and allowed petition.

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Issues involved:
The validity of the order cancelling the petitioner's registration u/s 29(2) of the Central Goods and Service Tax Act and the dismissal of the appeal u/s 2 of the same Act.

Validity of Order Cancelling Registration:
The petitioner, a registered entity, faced cancellation of its registration under the Central Goods and Services Tax Act. Initially, a notice was issued, and upon the petitioner's satisfactory reply, the proceedings were dropped. However, a subsequent notice was issued citing new reasons, including non-conduct of business and non-existence as per a D.G.G.I. report. The petitioner contended that the new notice was unreasonable given the previous resolution and lack of specific details in the new notice. The Assistant Commissioner relied on D.G.G.I.'s recommendation without providing the petitioner with an opportunity to clarify or defend against the allegations. The Additional Commissioner dismissed the petitioner's appeal against the cancellation order.

Principles of Natural Justice:
The failure to provide the petitioner with a copy of the D.G.G.I. letter and the Assistant Commissioner's reliance on higher authority's directions raised concerns about the independent application of mind. The absence of specific points from D.G.G.I.'s inquiry deprived the petitioner of a fair chance to respond. The court found these aspects unsustainable in law and quashed the cancellation order and the appeal dismissal.

Conclusion:
The High Court allowed the writ petition, quashing the cancellation order and the appeal dismissal. The authority was directed to initiate proceedings in compliance with natural justice principles.

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