GST Registration Cancellation Overturned: Procedural Flaws Expose Lack of Natural Justice in Administrative Action

HC allowed the writ petition challenging GST registration cancellation. The court found procedural violations and lack of natural justice in the cancellation order. The matter was remanded to the Assessing Officer with specific directions to issue a detailed show cause notice, provide an opportunity of hearing, and pass a reasoned order within the prescribed timeline. Petitioner's registration remained suspended pending final adjudication.

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Issues: Challenge to order of cancellation of registration on grounds of procedural lapses and violation of principles of natural justice.

Analysis:
The petitioner challenged the order of cancellation of registration on the grounds of not being provided with an opportunity of hearing and the order being passed without assigning any reason for cancellation. The petitioner contended that the Appellate Authority upheld the cancellation order and dismissed the appeal on the ground of limitation. The Court referred to a previous judgment where guidelines were issued to the respondent-authorities regarding the procedure to be followed in such cases. The Court emphasized the importance of providing detailed show cause notices and reasons for cancellation to avoid unnecessary litigation. The Court allowed all writ applications on the ground of violation of principles of natural justice, quashing the show cause notices and cancellation orders, and directing the authorities to issue fresh notices with reasons and provide a reasonable opportunity of hearing to the petitioners.

In the present case, the respondent authorities failed to follow the directions given in the previous judgment and issued cryptic notices and orders for cancellation of registration to the petitioner. The order of cancellation was passed without giving any reasons, and the appeals filed by the petitioners were dismissed under Section 107 of the GST Act. As a result, the respondent authorities were precluded from exercising revisional power under section 108 of the GST Act. The Court quashed and set aside the impugned orders and remanded the matter 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 by the Assessing Officer.

The Court provided specific directions to be followed in the remanded matter, including the Assessing Officer providing detailed reasons for cancellation of registration within two weeks, the petitioner filing a written reply within two weeks of receiving the reasons, and the respondent authorities passing an appropriate order after personal hearing within four weeks of the reply. Both parties were required to adhere to the timeline for disposal of the show cause notice. The Court clarified that it had not delved into the merits of the case and instructed the respondent authorities to pass an order in accordance with the law after providing detailed reasons and an opportunity of hearing to the petitioner.

Ultimately, the petition was partly allowed by quashing and setting aside the impugned orders, and the matter was remanded 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 disposed of as per the specified directions. The Court disposed of the petition, discharged the notice, and made no order as to costs.

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