2024 (10) TMI 607 - HC - GST

Court Overturns CGST/SGST Registration Cancellations; Orders Fresh Notices for Petitioners to Respond.

PARTH RAMESH, M/s. BAKE N JOY Versus SUPERINTENDENT, OFFICE OF SUPERINTENDENT, CENTRAL TAX AND CENTRAL EXCISE, KANNUR RANGE I, COMMISSIONER, OFFICE OF THE COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE

The HC ruled in favor of the petitioners, setting aside the cancellation of their CGST/SGST registrations due to insufficient reasons in the cancellation ... Cancellation of registration granted to the petitioners - SCN proposing cancellation is issued in Form GST REG - 31, whereas it should have been issued in Form GST REG - 17 - order of cancellation does not give any reason for cancellation and is merely a reproduction of certain provisions of Section 29 and Section 30 of the CGST / SGST Acts - violation of principles of natural justice - HELD THAT:- The petitioners are entitled to succeed on the ground that the order cancelling the registration does not spell out any reason for cancelling the registration except making reference to the provisions of Sections 29 and 30 of the CGST / SGST Acts. The impugned orders cancelling the registration are marked as Ext.P2 in both the writ petitions. Without going into question as to the reference to the wrong Form in the show cause notices is a defect in the proceedings, it is required to set aside the orders produced as Ext.P2 (in both the writ petitions) on the ground that they do not spell out any reason for canceling the registration of the petitioners - petition disposed off. Issues:Challenging orders cancelling registration under CGST/SGST Acts based on incorrect Form GST REG - 31, lack of reasons for cancellation, failure to utilize Amnesty Scheme, and failure to file application for revocation of cancellation.Analysis:The petitioners challenged the cancellation of their registration under the CGST/SGST Acts, arguing that the show cause notice was issued in the wrong form and lacked reasons for cancellation. They relied on previous judgments to support their contentions.The respondent Department contended that the use of the wrong form for the show cause notice did not prejudice the petitioners as the reasons for cancellation were clearly stated. They argued that the judgments cited by the petitioners were not applicable to the present case, as the reasons for cancellation were adequately provided in the show cause notices. The respondent emphasized that the cancellation order was free from defects and highlighted that the petitioners failed to take advantage of the Amnesty Scheme or file for revocation of the cancellation order.Upon hearing both parties, the court found in favor of the petitioners, ruling that the cancellation orders did not specify reasons for cancellation beyond referencing statutory provisions. The court cited a previous judgment where it was held that every order must stand on its own legs and provide reasons within the order itself. Consequently, the court set aside the cancellation orders and directed the respondent to pass fresh orders after allowing the petitioners to respond to the show cause notices and be heard.The court clarified that its decision was based on the lack of reasons for cancellation in the orders and did not delve into the issue of using the wrong form for the show cause notices. The court emphasized that it had not made any judgment on the merits of the case, leaving it open for the respondent to issue fresh orders in accordance with the law. The writ petitions were disposed of accordingly.