A Division Bench of the Andhra Pradesh High Court has recently held that, both impugned show cause notice as well as the order for cancellation of registration are not sustainable in the eye of law as both of them are not clear enough to understand the mind of the issuing authority.
The petitioner, M/s S A Traders assailed the cancellation of the registration of the petitioner under the GST Act, 2017 is being illegal, arbitrary and without following the principles of natural justice and for a consequential direction to set aside the impugned proceedings of the Goods and Service Tax Officer, Commercial Taxes-II.
Bhaskar Reddy Vemireddy appeared for the petitioner and learned Government Pleader for the Revenue.
It was submitted in behalf of the petitioner that, neither the show cause notice nor the order could not able to show any violation inasmuch as, in the show cause notice it has been mentioned “in case the registration has been obtained by means of fraud, wilful misstatement or suppression of facts”
It was also submitted that, in the cancellation order, it has been mentioned “On verification of GSTR 1 vs GSTR 3B returns and sales turnover, it is observed that, within a span of five months, the TRP has made purchase and sale of scrap worth of Rs.9.63 Crores for which he has not submitted clear records. Hence the transactions appear to be suspicious and hence registration is hereby canceled, according to the impugned order.
The Bench of Justice Durga Prasad Rao and Justice T Mallikarjuna Rao observed that, “both show cause notice as well as the order of cancellation of registration are dubious enough and failing to divulge the misdeed or fraud allegedly committed by the petitioner.”
As per the above observation, the Andhra Pradesh HC Set aside the impugned order, preserving the liberty for the Revenue to issue fresh Show Cause Notice in accordance with governing laws and rules.
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