In the recent case, the High Court of Delhi set aside a flawed show cause notice (SCN) issued to petitioner, which lacked specific details and supporting documents. The court ordered the immediate restoration of petitioner’s Goods and Service Tax (GST) registration but noted that new proceedings could be initiated if needed.
Anup Sharma,the petitioner-assessee, had filed a petition challenging the show cause notice(SCN) dated 04.07.2024 which was issued by the proper officer. The notice requested to explain why the petitioner’s GST registration should not be cancelled.
The petitioner was asked to reply to the impugned SCN within seven working days and to appear before the proper officer on 11.07.2024. The petitioner’s GST registration was suspended from 04.07.2024.
Get a Copy of GST Smart Guide , Click here
The petitioner submitted his reply to the challenged SCN on 05.07.2024, stating that the SCN was unclear and did not specify which bills or invoices were issued without supplying goods or services. He also objected to the SCN because it did not include the name and designation of the officer.
The court observed that the petitioner had argued that a month had passed since the petitioner submitted his reply, but no decision had been made on the challenged SCN. During this time, the petitioner’s GST registration remained suspended, which was the cause of his grievance.
The challenged SCN does not provide any specific reason for proposing to cancel the petitioner’s GST registration. It simply repeats Rule 21(b) of the Central Goods and Services Tax Rules(CGST Rules), 2017. The SCN also does not specify which bill or transaction is alleged to be non-compliant with the law.
Get a Copy of GST Smart Guide , Click here
Rule 21(b) of the CGST Rules allows canceling GST registration if an invoice or bill is issued without supplying goods or services. Nevertheless, the Proper Officer did not specify which invoice or bill the petitioner allegedly issued, and the SCN did not include any supporting documents.
The court contended that the purpose of a show cause notice is to give the recipient a chance to respond to specific accusations before any action is taken against them. If the notice doesn’t include clear allegations, it’s pointless.However,the challenged SCN fails to meet the required standards and is therefore liable to be set aside.
The division bench comprising Justice Vibhu Bakhru and Justice Sachin Datta allowed the petition, set aside the SCN, and directed the respondents to immediately restore the petitioner’s GST registration and contended that the order does not prevent the proper officer from starting new proceedings if needed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
