The Division Bench of Delhi High Court has quashed the notice issued through GST portal holding that the show cause notice (SCN) must clearly state the allegation that the concerned notice has to be met.
The petitioner, Surender Kumar Jain has filed the petition against the impugned Show Cause Notice which called upon the petitioner to show cause why its registration under the Goods and Services Tax Act, 2017 not be cancelled and cancelling the petitioner’s registration pursuant to the said Show Cause Notice.
In the impugned SCN, which indicates that the only reason for which the petitioner’s registration was proposed to be cancelled was stated as, “others”
Surender Kumar, on behalf of the petitioner contented that the impugned SCN had failed to disclose any reason for the proposed action, and was incapable of eliciting a meaningful response from the petitioner. He further submitted that, the impugned SCN did not qualify to be considered as a Show Cause Notice at all without providing proper information.
Atul Tripathi, on behalf of the revenue submitted that, the concerned officer had to select a reason for issuance of the Show Cause Notice, drop down menu in the GST common portal. Since none of the reasons in the drop-down menu were considered apposite, the concerned officer had selected the option “others”.
The Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan set aside the impugned order observing that, “The show cause notice must clearly state the allegations that the concerned notice has to meet. This being the essence of a show cause notice, any notice that does not qualify this criterion, cannot be considered as a show cause notice.”
The Bench also held that, If the concerned authorities find that they were unable to communicate the allegations in respect of which the response was elicited by way of a show cause notice, by selecting the options as available on the electronic system; the concerned authorities may consider issuing a physical show cause notice.
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