Natural justice in GST cancellation requires disclosed material and fair hearing before registration can be cancelled.

A GST registration cancellation based on a cryptic show cause notice, undisclosed relied-upon material, and denial of a proper hearing violates natural justice. The court noted that the allegation of no business activity from the declared premises conflicted with the physical verification report, while the allegation of passing on inadmissible input tax credit rested on a letter not furnished to the taxpayer. The cancellation order was therefore quashed, and the matter was remitted for fresh decision-making after disclosure of material, opportunity to reply, and a personal hearing.

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Issues: Whether the show cause notice and the consequential cancellation of GST registration were vitiated for want of adequate reasons, disclosure of relied-upon material, and opportunity of hearing, and whether the cancellation order could therefore be sustained.

Analysis: The impugned show cause notice was found to be cryptic. One stated ground that the firm was not conducting business from the declared place of business was inconsistent with the earlier physical verification report under Rule 25 of the Central Goods and Services Tax Rules, 2017, which recorded that the proprietor was present and the firm was functioning. The second allegation relating to passing on inadmissible input tax credit was based on a letter that had not been supplied to the Petitioner. The Petitioner was not furnished the material relied upon and was not afforded a proper hearing before cancellation of registration.

Conclusion: The cancellation order could not be sustained and was quashed and set aside. The Petitioner was entitled to disclosure of the relied-upon material, an opportunity to reply, and a personal hearing before fresh decision-making.

Final Conclusion: The writ petition succeeded to the extent that the cancellation of GST registration was annulled and the matter was remitted for fresh consideration in accordance with law after compliance with natural justice.

Ratio Decidendi: A GST registration cancellation founded on a cryptic notice, undisclosed material, and denial of a fair hearing violates natural justice and cannot be sustained.

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