2024 (10) TMI 39 - HC - GST

GST Registration Cancellation Order Overturned: Procedural Flaws Invalidate Notice, Reinstatement Granted with Compliance Mandate

Mohammed Sadiq Proprietor of M/s. S.J. Steel Versus The Superintendent Mysuru, Commissioner Of Central Tax (Appeals) Mysuru Division.

HC quashed GST registration cancellation order due to procedural deficiencies in Show Cause Notice. Despite appeal being time-barred, the Court allowed ... Cancellation of GST registration - violation of Rule 86B r.w. Rule 21 of CGST Rules, 2017 - appeal dismissed as barred by limitation - HELD THAT:- A perusal of the impugned Show Cause Notice at Annexure-C and the impugned order at Annexure-D will indicate that the sole ground on which GST registration of the petitioner has been cancelled is by coming to the conclusion that petitioner had violated Rule 86B of the CGST Rules. However, details, particulars etc, as regards violation are conspicuously absent and have not been mentioned either in the Show Cause Notice or in the impugned order. So also necessary enquiry in this regard has not been conducted by respondent No. 1 before passing the impugned order and consequently, in the absence of material particulars/details and necessary enquiry by respondent No. 1 as regards alleged violation of the petitioner of Rule 86B having not been conducted, it is opined that the impugned order at Annexure-D dated 07.09.2022 deserves to be quashed and direction be issued to respondent to reinstate/restore the GST registration by reserving liberty in favour of respondent to take necessary action in accordance with law. Insofar as dismissal of the appeal filed by the petitioner as barred by limitation is concerned, since the said appeal was filed beyond the maximum period of four months (3+1 months), the said appeal is no appeal in the eye of law and since the appeal has been dismissed summarily as barred by limitation, the impugned order would not merge with the Appellate Authority order. Consequently, dismissal of the Appellate Authority order would not come in the way of this Court in entertaining the petition by exercising its jurisdiction under Article 226 of the Constitution of India. Petition allowed. Issues:1. Quashing of Order cancelling GST registration based on Rule 86B of CGST Rules.2. Dismissal of appeal as barred by limitation.Analysis:1. The petitioner sought relief from the High Court to quash the Order cancelling GST registration based on Rule 86B of CGST Rules. The Court noted that the impugned Order was issued without specific details or necessary enquiry regarding the alleged violation by the petitioner. The Court found the absence of material particulars and details in the Show Cause Notice and the Order itself. Consequently, the Court deemed the Order cancelling GST registration to be quashed and directed the respondent to reinstate the registration, while reserving the right for the respondent to take further action in accordance with the law.2. The appeal filed by the petitioner was dismissed as barred by limitation since it was filed beyond the maximum period allowed. The Court clarified that the dismissal of the appeal on this ground did not merge with the Appellate Authority's order, allowing the High Court to entertain the petition under Article 226 of the Constitution of India. As a result, the Court allowed the petition, quashed the Show Cause Notice and the Order, directed the reinstatement of GST registration upon compliance with filing returns and payment of taxes, and reserved the right for the respondent to take necessary action within the legal framework.