GST registration cancellation notice must disclose factual basis; vague show-cause notice and consequential cancellation were set aside.

A show-cause notice proposing cancellation of GST registration must disclose the factual basis and specific transactions relied on, so the noticee can file an effective reply. A cryptic notice that merely cites statutory provisions and alleges violation without particulars is invalid, and a cancellation order founded on that notice cannot stand independently. The Court therefore set aside the cancellation, while permitting fresh proceedings through a new show-cause notice and directing completion within the stipulated time. If the proceedings are not concluded within time without the respondent's non-cooperation, restoration of registration would follow.

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Issues: (i) Whether the show-cause notice proposing cancellation of GST registration was vitiated for want of reasons and particulars. (ii) Whether the cancellation order could be sustained and what consequential directions should follow.

Issue (i): Whether the show-cause notice proposing cancellation of GST registration was vitiated for want of reasons and particulars.

Analysis: The notice merely referred to statutory provisions and alleged violation, but did not specify the transactions said to be in breach. A noticee must know the factual foundation of the proposed action so as to file an effective and meaningful reply. A cryptic and laconic notice that does not disclose the basis of the allegation does not satisfy that requirement.

Conclusion: The show-cause notice was invalid for want of adequate reasons and particulars, and its setting aside was justified.

Issue (ii): Whether the cancellation order could be sustained and what consequential directions should follow.

Analysis: The cancellation order was consequential to the defective notice and could not stand independently. At the same time, the Revenue was permitted to commence fresh proceedings, and the matter was directed to be concluded within a fixed period. The Court also indicated that if the proceedings were not concluded within time without the respondent's non-cooperation, restoration of registration would follow as ordered by the Single Judge.

Conclusion: The cancellation order was set aside, liberty was granted to issue a fresh show-cause notice, and the proceedings were directed to be concluded within the stipulated time.

Final Conclusion: The respondent obtained relief against the impugned cancellation, while the Revenue was allowed to pursue fresh proceedings within a time-bound framework.

Ratio Decidendi: A show-cause notice that does not disclose the factual basis of the proposed action is invalid because it denies the noticee an effective opportunity to respond.

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