GST cancellation notice must state specific grounds and allow the full reply period before any order is passed.

GST registration cancellation requires a show cause notice that clearly states the grounds for proposed cancellation and allows the statutory seven working days for reply. A notice containing only a general allegation of non-compliance does not satisfy Rule 22 of the CGST Rules, 2017. Where the cancellation order is passed before expiry of the reply period, the statutory procedure is not followed and the cancellation cannot be sustained. Fresh proceedings may be initiated only through a proper notice issued in accordance with law.

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Issues: Whether the cancellation of GST registration was sustainable when the show cause notice did not specify the grounds for proposed cancellation and the statutory period for reply was not allowed to expire.

Analysis: Rule 22 of the Central Goods and Services Tax Rules, 2017 requires issuance of a show cause notice containing the reasons for proposed cancellation and grants seven working days for submission of a reply. The notice issued to the petitioner did not disclose any specific violation of the GST Act or the Rules and used only a general assertion of non-compliance. Though seven working days were granted, the cancellation order was passed before expiry of that period. The notice therefore did not satisfy the statutory requirements governing cancellation of registration.

Conclusion: The cancellation order could not be sustained and was quashed. The petitioner succeeded, while the authority was left free to initiate fresh proceedings by issuing a proper notice in accordance with law.

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