2025 (4) TMI 927 - HC - GST

GST Registration Cancellation Notice Invalidated for Procedural Flaws and Violation of Natural Justice Principles

Destiny Star (India) Private Limited Versus Union Of India & Anr.

Gujarat HC quashed a GST registration cancellation notice due to procedural irregularities. The court found the tax authority failed to consider the ... Violation of principles of natural justice - reply filed by the petitioner not considered - Cancellation of the registration of the petitioner under section 29 of the Central Goods and Service Tax Act, 2017 - registration obtained by means of fraud, willful misstatement or suppression of facts as per section 29(2)(e) of the Act - HELD THAT:- There is a breach of the principles of natural justice by not considering the reply filed by the petitioner and observing in the impugned order that no reply to the show cause notice was submitted in absence of any reason assigned for alleged fraud, willful misstatement or suppression of facts as stated to be the reason for cancellation of registration. In view of the decision of this Court in the case of M/s. Aggrawal Dyeing & Printing [2022 (4) TMI 864 - GUJARAT HIGH COURT], the impugned show cause notice and the order of cancellation of registration is quashed and set aside and the matter is remanded back de novo after providing opportunity of hearing to the petitioner in accordance with law. Petition disposed off. In the case before the Gujarat High Court, the petitioner challenged a show cause notice and subsequent order for cancellation of their registration under Section 29 of the Central Goods and Services Tax Act, 2017. The cancellation was based on alleged fraud, willful misstatement, or suppression of facts as per Section 29(2)(e) of the Act. The petitioner argued that despite submitting a detailed reply to the show cause notice, the cancellation order erroneously stated that no reply was filed, thus breaching the principles of natural justice. Citing the precedent set in M/s. Aggrawal Dyeing & Printing vs. State of Gujarat, the Court found that the respondent authority failed to consider the petitioner's reply and did not provide reasons for the alleged misconduct. Consequently, the Court quashed the impugned notice and order, remanding the matter for de novo consideration with a directive to provide the petitioner an opportunity for a hearing. The exercise is to be completed within 12 weeks, with the registration remaining suspended until a final adjudication is made. The Court clarified that it did not address the merits of the case, focusing solely on procedural fairness and adherence to natural justice. The petition was disposed of accordingly.