Strict compliance with GST cancellation procedure required; use of wrong form and short response time vitiated cancellation.

Cancellation of GST registration was held illegal because the authority did not follow the statutory procedure for alleged Rule 10A non-compliance. The law required suspension and intimation in Form GST REG-31, followed by a thirty-day opportunity to explain before cancellation could be ordered, whereas the notice was issued in Form GST REG-17 and only seven days were given. The cancellation order was passed before expiry of the prescribed period, so the opportunity to respond was not meaningful. The notice and cancellation were quashed and registration was directed to be restored, while tax liabilities and other obligations remained unaffected.

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Issues: Whether the cancellation of GST registration was sustainable when the show-cause notice was issued in Form GST REG-17 instead of Form GST REG-31, and the petitioner was not granted the statutorily prescribed thirty days' time to respond to the alleged non-compliance with Rule 10A.

Analysis: The statutory scheme treated contravention of Rule 10A differently from ordinary cancellation under Rule 22. For a breach of Rule 10A, the registration was first to be suspended and the registered person was to be intimated in Form GST REG-31, with thirty days to explain why cancellation should not follow. By contrast, Rule 22 contemplated a seven-working-day notice in Form GST REG-17 where cancellation was proposed under Section 29. The impugned notice was issued in Form GST REG-17, gave only seven days' time, and the cancellation order was passed before expiry of the thirty-day period contemplated for Rule 10A non-compliance. The prescribed procedure was therefore not followed, and the opportunity afforded was not a meaningful one.

Conclusion: The notice and cancellation order were illegal and were quashed; restoration of the GST registration was directed.

Final Conclusion: The writ petition succeeded because the cancellation was vitiated by non-adherence to the statutorily mandated procedure and denial of an effective opportunity to respond, while the petitioner's tax liabilities and other obligations remained unaffected.

Ratio Decidendi: When the statute prescribes a specific procedure and form for action against a registered person, the authority must comply with that procedure strictly, and failure to grant the prescribed opportunity vitiates the cancellation.

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