2025 (7) TMI 1068 - HC - GST

Cancellation of GST Registration Certificate of the petitioner - reason for cancellation not provided - violation of principles of natural justice - dismissal of appeal on the ground of limitation - HELD THAT - In the present matter order of cancellation of registration is passed without giving any reason by the respondent authorities and Appeal filed by the petitioners under Section 107 of the GST Act is also dismissed. As the Appellate Authority has dismissed the Appeals of the petitioner the respondent-Authorities will not be able to exercise the revisional power under section 108 of the GST Act. Therefore the impugned order passed by the Appellate Authority as well as the order of cancellation of registration are required to be quashed and set aside. Accordingly the matter is remanded back to the Assessing Officer at the show-cause notice stage - Petition disposed off by way of remand.

Summary

ISSUES:

Whether the cancellation of GST registration without providing detailed reasons and opportunity of hearing violates principles of natural justice.Whether an appeal filed beyond the stipulated time period can be dismissed on the ground of limitation under Section 107 of the Gujarat Goods and Services Tax Act, 2017.Whether the authorities complied with the procedural requirements and guidelines issued by the High Court regarding issuance of show-cause notices and cancellation orders under the GST Act.Whether the appellate authority's dismissal of appeal affects the revisional powers of the respondent authorities under Section 108 of the GST Act.Whether the matter should be remanded for fresh consideration in accordance with law after providing adequate opportunity to the petitioner.

RULINGS / HOLDINGS:

The cancellation of GST registration without furnishing "detailed reasons" and without providing "opportunity of personal hearing" is a violation of the principles of natural justice and thus the impugned cancellation order is liable to be quashed and set aside.The appeal filed under Section 107 of the GST Act beyond the prescribed limitation period can be dismissed on the ground of delay, as held by the appellate authority.The respondent authorities failed to follow the guidelines issued by the High Court in M/s. Aggrawal Dyeing & Printing (2022), which require issuance of show-cause notices and cancellation orders containing all necessary particulars and forwarded physically by RPAD, resulting in procedural lapses.The dismissal of the appeal by the appellate authority precludes the respondent authorities from exercising revisional powers under Section 108 of the GST Act, necessitating quashing of both the appeal dismissal order and the cancellation order.The matter is remanded to the Assessing Officer for fresh consideration at the show-cause notice stage, with directions to provide detailed reasons, allow filing of written reply, grant personal hearing, and pass a speaking order within stipulated timelines, while the registration remains suspended.

RATIONALE:

The Court applied the principles of natural justice requiring that before cancellation of GST registration, the registered person must be given "detailed reasons" and "reasonable opportunity of hearing" to present their case, as established in the precedent judgment of M/s. Aggrawal Dyeing & Printing (2022).The statutory framework under the Gujarat Goods and Services Tax Act, 2017, particularly Sections 107 (Appeal) and 108 (Revision), governs limitation for appeals and scope of revisional powers, which the Court strictly enforced.The Court emphasized adherence to procedural safeguards to prevent "unnecessary litigation" and to ensure that cancellation orders do not "travel beyond the scope of the show cause notice," requiring that documentary or inspection evidence relied upon must be disclosed to the dealer beforehand.The Court recognized that failure to comply with procedural requirements results in violation of natural justice, justifying quashing of impugned orders and remand for fresh adjudication.No merits of the underlying tax liability or factual issues were decided; the Court's intervention was limited to procedural and jurisdictional compliance.