The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tushar Rao Gadela set aside the Show Cause Notice (SCN) and restored the cancelled Goods and Services Tax (GST) registration.
The bench observed that the SCN did not disclose the reason for the cancellation of the GST registration. Further stated that a show cause notice must clearly set out the reasons for proposing an adverse action in order for the noticee to respond to the same.
The petitioner, Rishiraj Aluminium Private Limited to set aside the impugned SCN issued by the GST authorities suspending the petitioner’s GST Registration and calling upon the petitioner to show cause as to why its GST Registration should not be cancelled.
As per the submissions of the petitioner, the bench observed that only reason stated in the impugned show cause notice for proposing cancellation of the petitioner’s GST Registration reads as: “Ceased to be liable to pay tax”.
From the above statement it is clear that the authorities failed to show the proper reason for the cancellation.
Anuj Aggarwal, the counsel appeared for the respondent has been unable to defend the impugned show cause notice.
The bench observed merits in the contentions of the petitioner that the petitioner was at a loss as to how to respond to the impugned show cause notice as it did not disclose any intelligible reason for proposing cancellation of the petitioner’s registration. Thus, the High Court restored the registration.
In addition, the bench clarified that the current court decision does not preclude the respondent from issuing a new show cause notice, clearly outlining the reasons for proposing to cancel the petitioner’s GST Registration, if the respondent wishes to proceed with the said action.
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