GST Registration Cancellation Notice Challenged: Petitioner Granted Opportunity to Respond with Detailed Clarifications Within Four Days

HC found merit in petitioner's challenge to GST registration cancellation show cause notice (SCN) due to lack of specificity. While not setting aside the SCN, the court allowed petitioner to respond to allegations within four working days and directed Proper Officer to expedite proceedings and decide registration status within a week, providing opportunity for detailed response and fair hearing.

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Issues: Impugning show cause notice for GST registration cancellation and suspension.

In this case, the petitioner challenged a show cause notice (SCN) dated 26.06.2024, which proposed the cancellation of the petitioner's GST registration and suspended it based on two reasons. The first reason was related to the returns furnished under the Central Goods and Services Tax Act, 2017, while the second reason was based on information indicating the non-existence or non-functionality of the petitioner's business at the principal place. Additionally, concerns were raised about the petitioner's involvement in fake transactions and passing fake Input Tax Credit (ITC). The petitioner was required to respond to the SCN within thirty days and appear before the Proper Officer for a hearing. However, the petitioner contended that they did not receive the specific memo mentioned in the SCN, which hindered their ability to respond effectively.

The respondent acknowledged that the memo was not communicated to the petitioner, leading to a lack of clarity regarding the allegations. The counter-affidavit filed highlighted the allegations against the petitioner, focusing on passing fake ITC to another dealer, resulting in a substantial amount. The Court found merit in the petitioner's argument that the SCN lacked specificity in detailing the grounds for cancellation. Despite this, the Court noted that the petitioner was now aware of the allegations through the counter-affidavit, which clarified the basis for the registration cancellation proposal.

Given the circumstances, the Court decided not to set aside the SCN but allowed the petitioner to respond to the allegations outlined in the counter-affidavit within four working days. The petitioner was directed to appear before the Proper Officer for further proceedings. The Court emphasized the importance of a timely decision on the GST registration status and urged the Proper Officer to expedite the process, preferably within a week from the specified date. The Proper Officer was granted the discretion to request additional material or documents deemed necessary for the decision-making process. Ultimately, the petition was disposed of under the outlined terms, ensuring the petitioner's right to respond and the Proper Officer's prompt consideration of the matter.

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