In a recent case, the High Court of Gujarat held that the cancellation order of Goods and Service Tax registration without stating the reason is invalid.
Mr Pranav Trivedi appeared on behalf of the respondents and Mr Uchit Sheth appeared for the petitioners.
Om Trading, the petitioners submitted that the petitioners are engaged in the business of trading in base oil and they are duly registered under the Goods and Services Tax Act, 2017 and a registration certificate has been issued by the respondent authority to the petitioner.
It was submitted that the petitioners purchased and sold goods in the usual course of business and the transactions were reflected in the returns. At this stage, it is pointed out that respondent no.2 – authority uploaded Show-cause notice dated 24.11.2021 on the GST portal proposing to cancel their registration certificate under the Act by simply stating that the registration was obtained using fraud, willful misstatement or suppression of facts.
Since the petitioners were not logging on GST portal and therefore, they were not aware of the issuance of the said notice, even, though the petitioners did not receive any documents in support of the said notice.
On the other hand, the respondents though tried to oppose this petition, fairly submitted that based on written communication, no speaking order was passed at the time of cancellation of registration. Therefore, if the order passed by the authority is quashed and if the authority is permitted to start fresh proceedings by law, then the said officer has no objection.
It was evident that the respondent authority has not disputed the fact that while issuing a Show-cause notice for cancellation of Registration, necessary documents were not supplied and the notice is cryptic. Therefore, the petitioners couldn’t give a reply to the said Show-cause notice.
It was that while passing the impugned order for cancellation of registration, the respondent authority has not assigned any reason and thus, the order passed by the respondent authority is not speaking.
While allowing the appeal, the two-judge panel of Justice Vipul M Pancholi and Justice Devan M Desai set aside and quashed the Show Cause notice and Order.
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