GST registration cancellation quashed for denying hearing opportunity during family medical emergency

Gujarat HC quashed GST registration cancellation order for violating natural justice principles. Despite petitioner's request for time due to family medical emergency (mother's cancer), respondent authorities hastily passed cancellation orders without hearing opportunity. The court found the orders lacked proper reasoning and supporting evidence, with authorities showing inhumane approach by ignoring genuine adjournment request. Matter remanded to respondent for fresh hearing and de novo order within twelve weeks. Petition disposed through remand.

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Issues:
1. Validity of show-cause notice and order of cancellation of registration under GST Act.
2. Violation of principles of natural justice.
3. Arbitrary exercise of power by tax authorities.
4. Urgency in passing the impugned order without proper consideration of circumstances.

Analysis:

Issue 1: Validity of show-cause notice and order of cancellation of registration under GST Act
The petitioner filed a petition under Article 227 challenging the show-cause notice and orders of cancellation of registration issued by the tax authorities. The petitioner argued that the notices were issued arbitrarily without proper reasons or supporting documents. The court observed that the authorities failed to provide adequate justification for invoking Section 29(2)(e) of the CGST Act. The orders of cancellation lacked substantive reasoning and were passed ex parte without granting the petitioner an opportunity to be heard. The court found the actions of the tax authorities to be unjust and set aside the impugned orders, remanding the matter back for a fresh decision.

Issue 2: Violation of principles of natural justice
The court noted that the tax authorities did not adhere to the principles of natural justice in the proceedings. Despite the petitioner's requests for more time to respond to the notices due to personal reasons, the authorities proceeded with the cancellation orders hastily. The court emphasized the importance of providing a fair opportunity of hearing before taking such drastic actions like cancellation of registration. The lack of consideration for the petitioner's circumstances and the failure to grant a proper hearing rendered the orders invalid.

Issue 3: Arbitrary exercise of power by tax authorities
The court criticized the tax authorities for their arbitrary exercise of power in issuing the show-cause notice and orders of cancellation. The authorities suspended the registration and attached the petitioner's bank accounts without sufficient grounds or evidence. The court found the actions of the authorities to be hasty and lacking proper justification. The failure to follow due process and provide a reasonable opportunity for the petitioner to present their case demonstrated an arbitrary exercise of power by the tax authorities.

Issue 4: Urgency in passing the impugned order without proper consideration of circumstances
The court raised concerns about the urgency displayed by the tax authorities in passing the impugned orders without considering the petitioner's circumstances. Despite the petitioner's genuine reasons for seeking more time to respond to the notices, the authorities proceeded with the cancellation orders hastily. The court noted that the authorities showed a lack of empathy and consideration for the petitioner's situation, highlighting a need for a more humane approach in such matters. The court quashed the impugned orders and directed the authorities to conduct a fresh hearing, emphasizing the importance of a fair and just process in such cases.

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