The Allahabad High Court directed to issue fresh show cause notice (SCN) under the Central Goods and Services Tax Act, 2017 (CGST Act) and observed that the cancellation of registration has serious impact on business entity.
The present writ petition has been filed by Hindustan Paper Machinery Industries against the order dated 9.8.2023 passed by the Superintendent, CGST. By that order the said authority has cancelled the registration of the petitioner under the Central Goods and Services Tax Act, 2017.
From a bare reading of the notice, reply furnished thereto and the impugned order it transpires, in the first place a wholly non-speaking show cause notice was issued to the petitioner. Besides making reference to the statutory requirement/ obligation on a registered person to issue a tax invoice only against actual business transaction, no fact allegation was made in that notice of any violation/ infringement of that statutory requirement, committed by the petitioner.
Neither date or detail of the tax invoice nor goods involved nor their value etc. nor the purchaser were disclosed. Even the period during which the law may have been allegedly infringed by the petitioner, was not specified in the show-cause notice. At the same time, the said communication suspended the registration of the petitioner.
A Division Bench comprising Justices Shiv Shanker Prasad and Saumitra Dayal Singh observed that “Such an order may not survive the test of law. Relegating the petitioner to the forum of alternative remedy in face of undisputed facts noted above may be of no real use or purpose. The writ court regularly relegates petitioners specifically in tax matters, to the forum of the statutory remedy of appeal where minimum compliances of law have been made. However on lack of jurisdiction or violation of principle of natural justice, the writ Court is equally inclined to offer interference to ensure due adherence to the rule of law both by the assessee as also the revenue authority.”
“Cancellation of registration has serious impact on a business entity. It causes a direct effect of closure of business. Unless the registration survives, no tax invoice may be issued and no return may easily be filed” the Bench noted.
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