Show cause notices for GST registration cancellation and natural justice breach: High Court quashes notices, allows fresh proceedings under procedural requirements

Violation of natural justice was found where show cause notices for cancellation of GST registration were issued without permitting response or personal hearing, and without required physical verification procedures; the court treated that breach as decisive and quashed the show cause notices and final orders. The availability of an efficacious statutory appeal was considered but rejected as a substitute because petitioners were denied the opportunity to be heard; the court allowed fresh proceedings provided statutory procedural requirements are followed strictly.

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Issues: (i) Whether the show-cause notices and consequent orders cancelling GST registrations are valid where the notices did not specify date and time for personal hearing and physical verification reports were not uploaded as required by Rule 25; (ii) Whether the writ petitions are maintainable despite availability of statutory appeal remedies where there is alleged violation of principles of natural justice and procedural requirements.

Issue (i): Validity of show-cause notices and cancellation orders for omission to specify date/time for personal hearing and failure to upload physical verification report as required by Rule 25 and Form GST REG-17.

Analysis: Form GST REG-17 prescribes furnishing a reply within seven working days and expressly directs that the authority shall specify date and time for personal hearing. Rule 25 mandates uploading the physical verification report and supporting documents on the common portal within fifteen working days of verification. The impugned show-cause notices granted time to file a reply but omitted specific date and time for personal hearing, and the physical verification report and related documents were not uploaded prior to passing the final orders. These procedural requirements are foundational to affording an opportunity of hearing and to an informed decision based on available records.

Conclusion: The show-cause notices and the subsequent cancellation orders are vitiated for non-compliance with Form GST REG-17 and Rule 25 and are quashed.

Issue (ii): Maintainability of writ petitions notwithstanding the availability of appeal under the CGST Act where violation of natural justice and ultra vires action is alleged.

Analysis: While an efficacious statutory appeal exists, established exceptions permit writ jurisdiction where there is a violation of principles of natural justice or where the proceedings are wholly without jurisdiction. Where procedural non-compliance at the initial stage results in denial of opportunity to be heard, an appeal may not be an adequate corrective remedy because it would amount to correction after an unfair original hearing. The facts show omission to provide specified personal hearing and failure to upload verification report, amounting to such procedural infirmity.

Conclusion: The writ petitions are maintainable and are allowed on the stated grounds; alternative statutory remedies do not preclude corrective writ relief in the present circumstances.

Final Conclusion: The show-cause notices and cancellation orders are quashed and the authority is permitted to initiate fresh proceedings if so advised, strictly complying with Form GST REG-17, Rule 25 of the CGST Rules, 2017, and applicable procedural safeguards.

Ratio Decidendi: Non-compliance with the procedural requirements of Form GST REG-17 and Rule 25 (failure to specify date/time for personal hearing and failure to upload physical verification report) vitiates show-cause notices and cancellation orders and justifies grant of writ relief despite availability of statutory appeal.

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