GST registration cancellation invalid when order travels beyond the show cause notice and denies a fair hearing.

GST registration cancellation was found unsustainable where the impugned order departed from the grounds stated in the show cause notice. The notice alleged fraud, wilful misstatement or suppression under Section 29(2)(e) of the CGST Act, but the order relied instead on non-filing of Form GSTR-10 under Section 39(1) and invoked Rules 21(a) and 21(e) without prior notice on those grounds. Because the reply was not considered on the basis of the case actually put to the taxpayer, the Court held that an effective opportunity of hearing was denied and quashed the cancellation order, leaving the authority free to issue a fresh notice with specific allegations.

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Issues: Whether the order cancelling GST registration was liable to be quashed for travelling beyond the show cause notice and for denying the petitioner an effective opportunity of hearing.

Analysis: The show cause notice proceeded on the basis of alleged fraud, wilful misstatement or suppression of facts under Section 29(2)(e) of the Central Goods and Services Tax Act, 2017. The impugned order, however, was founded on a different alleged default, namely failure to furnish the final return in Form GSTR-10 under Section 39(1) of the Central Goods and Services Tax Act, 2017, and also invoked Rule 21(a) and Rule 21(e) of the Central Goods and Services Tax Rules, 2017 without any prior notice on those grounds. The order therefore did not answer the reply on the basis on which notice had been issued and resulted in denial of a fair opportunity to meet the case.

Conclusion: The cancellation order was unsustainable and was quashed and set aside. The respondent was left free to issue a fresh show cause notice with specific allegations.

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