GST Registration Cancellation Overturned: Authorities Violated Procedural Norms and Natural Justice Principles

HC found the GST registration cancellation order invalid due to procedural violations. The authorities failed to provide adequate reasons in the Show Cause Notice, denied personal hearing, and retroactively canceled registration. The court set aside the cancellation, directed restoration of registration, and instructed the petitioner to comply with tax obligations within 30 days, emphasizing principles of natural justice.

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Issues:
- Cancellation of Goods and Services Tax (GST) registration
- Violation of principles of natural justice
- Rejection of applications for revocation of cancellation order
- Lack of intelligible reasons in Show Cause Notice (SCN)
- Absence of opportunity for personal hearing
- Retrospective cancellation of GST registration

Analysis:
The petitioner challenged the cancellation of its GST registration, which was based on a Show Cause Notice (SCN) alleging wrongful invoicing without supply of goods/services. The petitioner's GST registration was suspended without specifying a date for a personal hearing, leading to subsequent rejection of the application for revocation. The court noted that the cancellation order lacked intelligible reasons and violated natural justice principles by not providing a fair opportunity for the petitioner to respond. The order also retroactively canceled the GST registration from the date of its grant, further highlighting procedural irregularities.

The petitioner's subsequent applications for revocation were also rejected without proper reasons or opportunity for a personal hearing, indicating a repeated violation of natural justice principles. The court found the actions of the authorities to be arbitrary and lacking justification, ultimately setting aside the cancellation order and directing the restoration of the petitioner's GST registration. The petitioner was instructed to comply with tax obligations within thirty days, emphasizing the importance of timely filing returns and payment of dues.

The judgment clarified that setting aside the cancellation order did not prevent the authorities from taking lawful actions for statutory violations or dues recovery in the future. By allowing the petition and disposing of pending applications, the court upheld the importance of procedural fairness and adherence to natural justice principles in administrative actions related to GST registrations.

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