The Allahabad High Court quashed the cancellation of GST Registration as no opportunity of hearing was accorded.
The petitioner, M/S. S.S. Traders were engaged in the business of purchase and sale of Iron and Steel Goods. It was registered under the provisions of the Act of 2017. By means of show-cause notice, the petitioner was directed to show cause within seven working days from the date of service of the notice why its registration should not be cancelled. The petitioner submitted its reply but, by means of order the registration of the petitioner was cancelled for the reason that no one was found at the place of the business and neither any business activity nor any bill book were found at the time of the survey and the landlord of the premises had informed the survey team that no one came there to start a business and no business activity takes place there.
The order further observes that after scrutinizing the return, it was found that the petitioner had purchased goods worth Rs. 29,50,000/- from non-existing dealers and availed bogus input tax credit with mala fide intention. It was also found that after granting registration, the petitioner did not furnish bank account details in due time in terms of Rule 10A. The appeal filed by the petitioner before respondent no.3 was also dismissed, citing the very same reasons as in the order of cancellation.
The petitioner contended that the show cause notice reveals no details as to whether any survey had actually taken place or not and that what was the date and time fixed for a personal hearing. It is contended that the show cause notice, which is imperative compliance of the principles of natural justice, was mandatorily required to furnish basic details regarding the date and time of the personal hearing.
The single bench of Justice Jayant Banerji held that the denial of opportunity of hearing to the petitioner as is mandated in the first proviso to sub-section (2) of Section 29 of the Act of 2017 vitiates the proceedings as well as the orders cancelling the registration of the petitioner.
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