GST registration cancellation challenge dismissed for not pursuing Section 30 remedies first

The AP HC dismissed a writ petition challenging GST registration cancellation for lack of pursuing alternative remedies under Section 30 of GST Act. While acknowledging that writ petitions may be maintainable despite alternative remedies when fundamental rights or natural justice principles are violated, the court found the show cause notice provided adequate particulars of alleged bogus invoice transactions. The petitioner failed to utilize available statutory remedies. However, considering business continuity concerns, the court granted opportunity to challenge the cancellation order through proper statutory channels within reasonable time.

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Issues:
Cancellation of registration under CGST/APGST Act, 2017 on grounds of alleged fraudulent activities, Violation of principles of natural justice, Maintainability of writ petition due to availability of alternative remedy.

Analysis:
The petitioner, a business entity dealing in iron scrap, challenged the cancellation of its registration under CGST/APGST Act, 2017 on the basis of alleged fraudulent activities by its suppliers. The petitioner contended that the show cause notice issued by the 1st respondent did not provide all relevant reports and particulars, thereby violating principles of natural justice. The petitioner argued that without proper evidence, the cancellation was unjustified and based on incorrect grounds. The petitioner also highlighted that the impugned order was passed without considering crucial aspects, such as the lack of inward receipt of goods leading to the absence of outward sales. The petitioner emphasized the violation of natural justice due to the non-supply of reports by GST authorities, which formed the basis of the show cause notice.

The petitioner's counsel vehemently argued against the cancellation, asserting that the petitioner did not engage in fraudulent activities and was not provided with necessary information to respond effectively. On the other hand, the Government Pleader for Commercial Taxes contended that the writ petition was not maintainable as the petitioner had alternative remedies available under the law, such as filing a petition for revocation of cancellation or appealing against the impugned order. The Government Pleader maintained that the show cause notice contained particulars of non-existent dealers involved in fraudulent transactions, negating the petitioner's claim of lack of information and violation of natural justice.

The Court deliberated on the maintainability of the writ petition in light of the availability of alternative remedies. Citing legal precedent, the Court noted that the writ petition could be maintainable in specific circumstances, including the violation of principles of natural justice. Upon reviewing the show cause notice, the Court found that necessary particulars were provided, refuting the petitioner's argument of information deficiency and natural justice violation. While acknowledging the petitioner's right to challenge the impugned order through alternative remedies, the Court dismissed the writ petition. However, the Court granted the petitioner an opportunity to either file a petition for revocation of cancellation or appeal the order within 15 days, ensuring a fair hearing for both parties.

In conclusion, the Court's judgment dismissed the writ petition but allowed the petitioner the chance to challenge the cancellation of registration through appropriate legal channels within a specified timeframe. The Court emphasized the importance of adhering to principles of natural justice while providing avenues for redressal under the law.

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