GST Registration Reinstated Due to Breach of Natural Justice; Petitioners Granted Opportunity to Respond and Update Business Info.

The HC annulled the order canceling GST registration with retrospective effect from 01.07.2017, citing a breach of natural justice due to a lack of opportunity for the petitioners to respond and be heard. The petitioners were given two weeks to address the SCN, and the proper officer was directed to issue a reasoned order post-hearing. Additionally, the petitioners were permitted to apply for a change of principal place of business, with assurances of fair consideration despite the GST registration suspension from 14.03.2023. The petition was resolved, and any pending applications were addressed.

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Issues:
Impugning the cancellation of Goods and Services Tax (GST) registration with retrospective effect from 01.07.2017 based on a Show Cause Notice (SCN) citing the principal place of business not being found during a field visit. Lack of opportunity for the petitioner to respond and be heard before the cancellation.

Analysis:

1. The petitioners challenged the cancellation of GST registration with retrospective effect from 01.07.2017, based on an impugned order issued on 31.03.2023 following an SCN dated 14.03.2023. The impugned SCN cited the reason for cancellation as the principal place of business not being found during a field visit.

2. The respondents argued that the petitioner's principal place of business was attached by secured lenders under the SARFAESI Act, indicating that the business was not being conducted from the said premises. However, the petitioners contended that the premises were attached on the same day the impugned SCN was issued, and it does not imply that the business was not operated from there since inception.

3. The High Court noted that the impugned SCN did not propose retrospective cancellation from 01.07.2017. Additionally, the lack of fixing a date or time for a personal hearing deprived the petitioners of the opportunity to be heard, violating principles of natural justice.

4. Consequently, the High Court set aside the impugned order due to the violation of natural justice principles. The petitioners were granted two weeks to respond to the SCN, and the proper officer was instructed to consider the response and pass a reasoned order after providing an opportunity for a hearing.

5. The petitioners were also allowed to file an application for a change of principal place of business, with assurance that the application would be considered on its merits despite the suspension of GST registration from 14.03.2023. The petition was disposed of accordingly, and any pending application was also resolved.

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