The Allahabad High Court (HC) in its significant judgement has held that non-submission of reply to Show Cause Notice ( SCN )is not a valid ground for cancellation of GST registration.
M/S Agarwal Construction Company challenged the order whereby the GST registration of the petitioner has been cancelled and the appeal under the U.P. Goods and Service Tax Act, 2017 filed against the cancellation of registration has been dismissed.
The petitioner is the sole proprietary of the firm engaged in the business of civil construction work and was registered under GST Act. The GST return was not filed by the assessee and thereafter a show cause notice dated 18.07.2022 was issued, directing the petitioner to furnish a reply to the notice within seven working days from the date of service of the notice.
The petitioner was not able to get the show cause notice issued by the respondent and he could not submit the reply within the stipulated time, thus, an order came to be passed on 30.07.2022 whereby registration of the petitioner was cancelled.
It was argued by the petitioner that the order dated 30.07.2022 is self-contradictory as in one line it is stated that the petitioner has submitted his reply to the show cause notice dated 18.07.2022 while in the very next line, it is noted that the petitioner has not submitted a reply to the show cause notice.
In the case of Technosum India Pvt. Ltd. Lucknow Vs. Union of India and others, the Court has held that the impugned order does not assign any reason whatsoever for cancelling the registration of the petitioner and is passed only on the ground that a reply to the show cause notice is not given.
Justice Vivek Chaudhary observed that the non-submission of a reply to the show cause cannot be a ground for cancellation of the registration and the benefit of the order dated 26.9.2022 passed in Writ Tax No.145 of 2022, shall also be made available to the present petitioner.
While allowing the petition the Court set aside the order and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of the order within three weeks.
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