2024 (7) TMI 988 - HC - GST

GST registration cancelled for alleged fraud and suppression; order set aside for ignoring reply and denying meaningful hearing.

The dominant issue was whether cancellation of GST registration for alleged fraud, wilful misstatement or suppression was vitiated by the Proper Officer's ... Cancellation of registration of petitioner - fraud, willful misstatement, or suppression of facts in obtaining registration - HELD THAT:- Although, initially, it was claimed on behalf of the said firm that the basis on which the aforesaid show cause notice had been issued had not been disclosed, however, subsequent to the Proper Officer by communication dated 5th February, 2021 clarifying the position and once again by enclosing the documents as an attachment had forwarded the same to the petitioners, the said firm though the petitioners had filed its response dated 9th February, 2021 - The records, however, reveals that by an order dated 8th March, 2021 the Proper Officer under the said Act by proceeding on the premise that the said firm had failed to reply to the show cause notice had cancelled the firm's registration. The matter is remanded back to the Proper Officer for reconsideration of the firm's case by taking note of the response given by the petitioners and to decide the same upon giving an opportunity of hearing to the petitioners - Petition disposed off by way of remand. Issues:Challenge to the cancellation of registration under the West Bengal GST/CGST Act, 2017.Analysis:The petitioners, as partners of a partnership firm, challenged the cancellation of registration under the West Bengal GST/CGST Act, 2017. A show cause notice was issued on 27th January, 2021, alleging fraud, willful misstatement, or suppression of facts in obtaining registration. The petitioners responded to the notice, providing documents to support their case. However, the Proper Officer cancelled the firm's registration on 8th March, 2021, citing failure to reply to the notice and other reasons. The petitioners argued that the cancellation was unjust as their response was not considered. The Government Pleader contended that all necessary particulars were disclosed, and no interference was warranted. The court noted that the cancellation order was passed without considering the petitioners' response, deeming it mechanical and perverse.The court set aside the cancellation order and remanded the matter to the Proper Officer for reconsideration, directing a fresh decision after considering the petitioners' response and providing them with a hearing opportunity. The petitioners were allowed to raise legal points, including non-compliance with relevant rules. They were also permitted to apply for revocation of the suspension order, which the Proper Officer must decide within four weeks of application. The reconsideration of the show cause notice was to be completed within six weeks of the court's order. The writ petition was disposed of with no costs awarded, and parties could obtain a certified copy of the order upon request.