The Gujarat High Court ( HC ) has held that the cancellation of GST registration without providing a reason in Show Cause Notice ( SCN ) or Order is not Valid.
Gigamade Machineries Private Limited, the petitioner challenged the illegal action of the respondent State Tax Officer cancelling of registration of the petitioner under the Gujarat Goods and Services Tax Act, 2017 (‘the GGST Act, 2017’ ).
The petitioner is a registered firm under the Gujarat Goods and Services Tax Act, 2017, having goods and service tax identification No.24AAICG3973D1ZO. The State Tax Officer issued a show-cause notice dated 09.05.2022 in the exercise of powers under Section 29 of the CGST Act, 2017 read with Rule 22(1) of the Central Goods and Services Tax Rules, 2017. The show-cause notice simply stated that the Taxpayer found non-functioning / not existing at the principal place of business”.
The body of the notice did not elaborate on the reason for the issuance of the show cause notice and did not specify any particulars. The notice did not disclose the basis for suo moto initiating the process for cancellation of registration.
The petitioner contended that the notice does not give any reasons for initiating the process of cancellation of GST registration of the petitioner and has been issued by a person who is not authorized in law to initiate a process for cancellation of registration.
A two-member bench comprising Justice Sonia Gokani and Justice Sandeep N Bhatt found that the said show cause notice is vague, bereft of any material particulars and the impugned order is also vague and a nonspeaking order.
Further viewed that the authority failed to follow the principles of natural justice. The order is not only nonspeaking but cryptic in nature and the reason for cancellation is not decipherable therefrom.
The Court quashed the show-cause notice dated 09.05.2022 and the order of cancellation of GST registration dated 04.06.2022, the respective GST registration stands revived.
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