TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Cancellation of GST registration quashed for cryptic order violating natural justice; remand under s.107(11) held beyond power</h1> <h3>M/s Kanha Shree Steels Versus Assistant Deputy Commissioner Cgst Division-Vi Ghaziabad And 3 Others</h3> M/s Kanha Shree Steels Versus Assistant Deputy Commissioner Cgst Division-Vi Ghaziabad And 3 Others - 2025:AHC:140765 ISSUES PRESENTED AND CONSIDERED 1. Whether an appellate authority, having held that a show cause notice and an order of cancellation are cryptic and devoid of reasons, may remit the matter to the adjudicating authority for verification of facts or otherwise give the Revenue a 'second inning'. 2. Whether a show cause notice and an order cancelling registration that do not set out reasons in detail satisfy the requirements of natural justice and statutory standards for notice, such that they can be sustained. 3. Whether, upon quashing of a cryptic show cause notice and cancellation order by the appellate authority, the Revenue is precluded from taking any fresh action at all, or whether the authority may proceed afresh in accordance with law. ISSUE-WISE DETAILED ANALYSIS Issue 1: Power of appellate authority to remit or direct further verification after quashing a defective show cause notice/order Legal framework: Section 107(11) of the GST Act (as interpreted in the judgment) permits the Appellate Authority, 'after making such further inquiry as may be necessary', to pass such order as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against, but expressly provides that it 'shall not refer the case back to the adjudicating authority that passed the said decision or order.' Precedent Treatment: The Court considered earlier pronouncements addressing standards of show cause notices (cited decisions within the impugned order) that emphasize requirement of detailed reasons; however, no direct precedent was invoked to permit remand in the face of statutory prohibition on referral back. Interpretation and reasoning: The Court reads the statutory bar against referring the case back as forbidding the appellate authority from remanding to the original adjudicating authority for further fact-verification when the appellate authority has concluded that the underlying notice/order are unsustainable. Once the appellate authority has found that the show cause notice and order are cryptic and therefore liable to be quashed, giving the Revenue another opportunity to verify facts or re-adjudge effectively amounts to a prohibited referral or a 'second inning'. The phrase 'after making such further inquiry as may be necessary' contemplates inquiries by the appellate authority itself, not referral to the original adjudicator. Ratio vs. Obiter: Ratio - the statutory prohibition on remand (Section 107(11)) bars the appellate authority from sending the matter back to the adjudicating authority once it has annulled the impugned order; such a remand in that factual posture is unauthorized. Obiter - interpretive remarks about the general scope of 'further inquiry' being limited to inquiries by the appellate authority itself. Conclusion: The part of the appellate order remanding the matter to the Assistant/Deputy Commissioner for verification of facts is ultra vires and is set aside. Issue 2: Validity of a show cause notice and cancellation order that lack detailed reasons (natural justice / statutory notice standards) Legal framework: Administrative law principles and statutory requirements demand that a show cause notice specify reasons and particulars sufficiently to enable the noticee to respond; a cryptic notice or order without reasons violates principles of natural justice and cannot stand. Precedent Treatment: The appellate order relied on authority holding that show cause notices must clearly indicate reasons and particulars (as quoted in the impugned appellate reasoning). The Court does not overturn these precedents but accepts their applicability. Interpretation and reasoning: The appellate authority's finding that the show cause notice and cancellation order were 'cryptic' and 'without reasons in detail' is supported by established law requiring particularized allegations and rationale. The Court records that 'it is nobody's case' that the authority did not so conclude, i.e., the appellate authority validly found deficiency of reasons and quashed the impugned actions on that basis. Thus, the quashing on grounds of inadequate reasons aligns with principles of natural justice and statutory standards for notice. Ratio vs. Obiter: Ratio - a show cause notice and cancellation order that fail to set out reasons in detail and particularize allegations are liable to be quashed for violation of natural justice. Obiter - citation of specific prior decisions as illustrative support for this principle. Conclusion: The appellate authority correctly held the show cause notice and order to be cryptic and liable to be quashed; that part of its reasoning is legally sound. Issue 3: Consequences of quashing - whether State/Revenue may initiate fresh proceedings Legal framework: Quashing of a defective notice/order removes that decision from the field; statutory scheme and general administrative law do not necessarily preclude the initiating authority from proceeding afresh if law permits, subject to procedural safeguards and limitation principles. Precedent Treatment: The Court noted that while the remand was impermissible, the respondents remain 'at liberty to act in accordance with law for taking fresh course of action, if available under the law.' No prior decision was overruled on this point. Interpretation and reasoning: The Court distinguishes between (a) an impermissible remand by the appellate forum to the original adjudicator after quashing, and (b) the permissible institution of fresh proceedings by the Revenue where legal grounds exist, provided such fresh action complies with statutory provisions and natural justice. The prohibition in Section 107(11) does not immunize the subject from future action; it only limits the appellate authority's power to refer the same appeal back. Ratio vs. Obiter: Ratio - quashing does not preclude the Revenue from initiating fresh proceedings if lawfully permitted; remand by the appellate body to the original adjudicating authority in the circumstances found is not authorized. Obiter - procedural guidance on how respondents may proceed (general statement of liberty to act in accordance with law). Conclusion: The impugned remand and the subsequent related order are set aside, but the authorities may lawfully proceed afresh if statutory conditions for fresh action are met. Cross-References and Interrelationships The analysis of Issue 1 is dependent on Issue 2: the appellate authority's power (or lack thereof) to remit is implicated only after it has quashed the defective notice/order for lack of reasons. The Court treats the quashing on natural justice grounds as valid (Issue 2), and on that basis concludes that the remedial step taken (remand) was statutorily impermissible (Issue 1). Issue 3 clarifies the legal consequence of setting aside the remand - vacatur of the impugned orders while preserving the Revenue's right to institute fresh proceedings in accordance with law.
TaxTMI 
TaxTMI 
