GST Registration Cancellation Order Overturned: Procedural Flaws Invalidate Retrospective Penalty Without Fair Hearing Process

HC found the GST registration cancellation order invalid due to procedural irregularities. The order lacked proper reasoning, denied fair hearing, and was issued with retrospective effect. HC set aside the order, directing the Appellate Authority to reevaluate the appeal, provide a personal hearing, and expeditiously resolve the matter within eight weeks.

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Issues:
Challenge to the order cancelling GST registration based on discrepancies in returns filed.

Analysis:
The petitioner contested the order cancelling its GST registration, which was based on discrepancies in the returns filed. The petitioner had migrated to the CGST regime and was assigned a GSTIN. The Proper Officer issued a Show Cause Notice (SCN) due to the petitioner's failure to respond to an earlier notice. The impugned SCN cited the reason for proposing cancellation as the non-filing of ASMT-10. The petitioner's registration was suspended, and failure to respond led to cancellation with retrospective effect. The cancellation order did not specify any appointed date or time for a personal hearing, denying the petitioner a fair opportunity to be heard.

Analysis:
The petitioner's claim of not receiving physical notice and business disruption due to the pandemic was considered. An appeal against the cancellation order was filed after the stipulated period, leading to non-entertainment by the Appellate Authority. Reference was made to the Supreme Court's decision condoning delays in cases where the limitation period expired before a certain date. The cancellation of the GST registration with retrospective effect lacked reasons in both the impugned SCN and the cancellation order.

Analysis:
In light of the peculiar circumstances, the High Court set aside the impugned order and remanded the matter to the Appellate Authority. The Appellate Authority was directed to reevaluate the appeal without considering the delay issue and to provide the petitioner with a personal hearing. A request was made for expeditious disposal of the appeal within eight weeks. The petition was disposed of accordingly.

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