GST Registration Cancellation Overturned: Authorities Must Provide Fair Hearing and Substantive Reasoning Before Taking Action

The HC found procedural violations in GST registration cancellation. The Court quashed existing orders due to lack of hearing and reasons, remanding the matter to the Assessing Officer. The petitioner's registration remains suspended pending a fresh show cause notice with proper procedural compliance. The Court directed authorities to follow natural justice principles and provide detailed reasons before passing any order.

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Issues:
Challenge to order of cancellation of registration on grounds of lack of hearing and reasons; Non-compliance with court guidelines on issuance of notices; Appeal dismissal under GST Act; Remand to Assessing Officer with specific directions.

Analysis:
The petitioner challenged the order of cancellation of registration, citing lack of opportunity for a hearing and absence of reasons for cancellation. The petitioner's appeal was dismissed by the Appellate Authority based on a limitation ground. The Court referred to its guidelines in a previous case regarding the issuance of show cause notices and final orders, emphasizing the importance of providing detailed information to the dealer to avoid unnecessary litigation. The Court allowed all writ applications due to a violation of natural justice principles, quashing the show cause notices and cancellation orders, and directing the authorities to issue fresh notices with reasons and provide a hearing opportunity before passing new orders.

Despite the Court's directions, the respondent authorities continued to issue cryptic notices and orders for cancellation of registration without following the prescribed procedure. In the present case, the cancellation order lacked reasons, and the petitioner's appeals under the GST Act were also dismissed. As the Appellate Authority rejected the appeals, the revisional power under section 108 of the GST Act was not available to the respondent authorities. Consequently, the impugned orders were required to be quashed, and the matter was remanded back to the Assessing Officer at the show cause notice stage. The registration of the petitioner was to remain suspended until the show cause notice was decided, with specific timelines and directions provided for the process.

The Court partially allowed the petition by setting aside the impugned orders and remanding the matter to the Assessing Officer. However, the registration of the petitioner would remain suspended until the show cause notice was disposed of as per the specified directions. It was clarified that the Court did not delve into the merits of the case, and the respondent authorities were directed to pass appropriate orders in accordance with the law, providing detailed reasons and a hearing opportunity to the petitioner. The petition was disposed of, with notice discharged and no order as to costs.

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