In a recent case, the High Court of Delhi found that the show cause notice ( SCN ) was insufficiently detailed and thus invalid. The court granted the petition, canceled the notice, and directed the immediate restoration of the petitioner’s Goods and Services Tax ( GST ) registration, while allowing for the possibility of new proceedings if warranted. The pending application was also disposed of.
Prince Garg, the petitioner-assessee, filed a petition challenging the SCN dated 02.07.2024 issued by the proper officer, which called upon him to show cause why his GST registration should not be cancelled.
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The petitioner was also instructed to submit a reply to the impugned SCN within seven working days from the date the notice was served and was ordered to appear before the proper officer on 10.07.2024.
Additionally, the petitioner’s GST registration was suspended starting from 02.07.2024, the date of the impugned SCN. The petitioner responded to the SCN on 09.07.2024, arguing that it was vague and did not specify which bill or invoice was issued without supplying goods or services and also objected to the SCN, noting that it lacked the name and designation of the officer who issued it.
The court noted that despite a month having passed since the petitioner submitted his reply, no decision had been made on the impugned SCN. During this period, the petitioner’s GST registration remained suspended, which was the main basis of his grievance.
The court observed that the impugned SCN lacked specificity and failed to identify which invoice or transaction was alleged to be in violation. It noted that the SCN merely cited Rule 21(b) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) without detailing which particular bill or invoice was issued without the supply of goods or services.
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The bench also highlighted that no supporting documents were provided with the SCN to clarify the allegations.
The court noted that a show cause notice is meant to let the noticee address specific allegations before any adverse action is taken. Without clear allegations, the notice was ineffective.
The division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta found that the impugned SCN did not meet the necessary requirements. Consequently, the petition was granted, the SCN was canceled, and the respondents were ordered to immediately restore the petitioner’s GST registration
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