2023 (5) TMI 1019 - HC - GST

Cancellation of GST registration of petitioner - reason for proposing the aforesaid adverse action was stated to be Others - non-compliance with Rule 25 of the Central Goods and Services Tax Rules 2017 - violation of principles of natural justice - HELD THAT - The show cause notice is inadequate and fails to meet the requisite standards of a show-cause notice. The impugned show cause notice does not disclose any discernible reason for proposing adverse action against the petitioner. The purpose of a show-cause notice is to apprise the noticee regarding the reason for the proposed action to enable him to respond to the same. This in turn enables the concerned authority to make an informed decision. No adverse order could be passed against the petitioner without informing the petitioner of reasons for the same and affording him an opportunity to respond to the same. Thus the impugned order dated 14.02.2023 is void as having been passed in violation of the principles of natural justice. Neither the show cause notice dated 25.01.2023 nor the impugned order can be sustained. Since it is now clear that the respondents proposed to cancel the petitioner s registration on the assumption that he was not-existent at his principal place of business this Court considers it apposite to set aside the impugned order and remand the matter to the concerned officer to consider afresh after affording the petitioner a full opportunity to be heard - Petition disposed off.

Summary

Issues involved:
The judgment involves a challenge to a show cause notice and an order passed by the concerned authority regarding the cancellation of GST registration.

Details of the judgment:
The petitioner, an individual conducting business as a sole proprietor, challenged a show cause notice dated 25.01.2023 and an order dated 14.02.2023 for the cancellation of GST registration. The petitioner claimed to operate a business for exporting automobile parts and hardware products from a specific location. The show cause notice was issued due to a delayed response to summons and failure to provide documents on time. The petitioner responded to the notice, explaining the reasons for the delay and expressing willingness to take responsibility. However, the concerned officer proceeded to cancel the registration citing the non-existence of the taxpayer based on a letter from the Deputy Commissioner. The petitioner contended that the cancellation was erroneous as he continued business operations from the registered premises. It was argued that the show cause notice did not meet the required standards and failed to provide a discernible reason for adverse action, violating principles of natural justice. The court found both the show cause notice and the impugned order unsustainable, setting aside the order and remanding the matter for reconsideration after affording the petitioner a full opportunity to be heard. The petitioner was granted the liberty to file a response and appear before the concerned officer with relevant documents. The officer was directed to consider the objections raised and issue a speaking order within two weeks.

Separate Judgment:
No separate judgment was delivered by the judges in this case.