Cancellation of GST Registration without Stating Reason is Cryptic: Gujarat HC quashes the SCN [Read Order]

The Gujarat High Court (HC) quashed the Show Cause Notice (SCN) wherein the cancellation of Goods and Service Tax (GST) registration without stating the reason is cryptic.

Sarvoday Impex, the petitioner is registered under Central Goods and Service Tax Act, 2017 (‘the Act’). A show cause notice in Form of GST REG-17/31 came to be issued by the respondent authorities while exercising power under Section 29 of the Act read with Rule 22(1) of the Central Goods and Services Tax Rules, 2017wherein it was stated that the reason for issuance of notice was because of Registration has been obtained using fraud, wilful misstatement or suppression of facts.

It was submitted that the said show-cause notice is as vague as possible and does not refer to any particular facts much less point out to enable the noticee to give its reply. On the other hand, the respondent’s detail about the alleged fraud and illegality committed by the petitioner has not been stated.

 It was stated in the reply that the impugned show-cause notice for cancellation of registration of the petitioner has been issued through the common portal and there is no facility or mechanism to upload other documents while issuing a system-based show-cause notice through a common portal. Therefore, he contended that because of the said technical glitch, the details are not provided to the petitioner in the show-cause notice.

A Coram Comprising Justice Vipul M Pancholi and Justice Devan M Desai has observed that “some discrepancy occurred on account of some technical glitch in the system (online portal). The reply filed by the respondent is on record.”

The impugned show-cause notice dated 06.01.2023, being without reasons, is cryptic and the bench quashed and set aside. However, liberty is granted to the respondent authorities to issue a fresh notice with particulars of reasons incorporated with details and thereafter to provide a reasonable opportunity of hearing to the petitioner and to pass appropriate order bythe law. The concerned respondent is hereby directed to restore the registration of the petitioner forthwith.

Mr Maulik Nanavati advocate appeared for the petitioner and Mr  C.B. Gupta, advocate for the respondents.

To Read the full text of the Order CLICK HERE

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