Natural justice in GST cancellation: vague notice and undisclosed material cannot support retrospective registration cancellation.

A GST registration cannot be retrospectively cancelled on the basis of a vague show cause notice that fails to annex the material relied on or disclose that retrospective cancellation is proposed. The High Court held that merely citing alleged contraventions and repeating broad allegations in the cancellation order does not cure the defect, because the registered person must receive a fair, specific notice and a real opportunity to respond. Retrospective cancellation is legally permissible only where the authority states the basis for that action and complies with natural justice; the notice and cancellation order were therefore quashed, with liberty to proceed afresh in accordance with law.

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Issues: Whether the show cause notice and the order cancelling GST registration retrospectively were sustainable when the notice was vague, no supportive material was supplied, and the taxpayer was not put to prior notice of the proposed retrospective cancellation.

Analysis: The notice merely referred to alleged contraventions under Rule 21(b) and Rule 21(e) and alluded to supportive documents, but no such documents were annexed. It also did not disclose that retrospective cancellation was proposed. The cancellation order repeated the same broad allegations and relied on a reply and non-appearance at hearing, but it did not cure the absence of specific notice or meaningful disclosure of the material relied upon. Retrospective cancellation is permissible in law, but only where the authority states the basis for such action and gives the person proceeded against a fair opportunity to meet the proposed action.

Conclusion: The show cause notice and the retrospective cancellation order were unsustainable and were quashed for violation of natural justice. Liberty was reserved to proceed afresh in accordance with law.

Ratio Decidendi: A GST registration cannot be retrospectively cancelled on the basis of a vague show cause notice that does not disclose the material relied upon or put the registered person to notice of the proposed retrospective effect, since such action must comply with the principles of natural justice and afford a real opportunity of response.

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