In a recent case, the Delhi High Court has set aside the show cause notice (SCN) which suspended the Goods and Service Tax (GST) registration without stating specific allegation.
Fayiz Nangaparambil, the petitioner challenged the Show Cause Notice dated 20.05.2023, whereby the petitioner was called upon to show cause as to why his GST registration not be cancelled.
The Show Cause Notice also recorded that the petitioner’s GST registration is suspended with effect from 20.05.2023.
The only reason indicated in the Show Cause Notice was that the Section 29(2)(e)-registration was obtained using fraud, wilful misstatement or suppression of facts. The Show Cause Notice is bereft of any specific reasons that could be addressed by the petitioner.
As per Section 29(2)(e)of the Central Goods and Service Tax Act (CGST), 2017, the proper officer may cancel the registration of a person from such date, including any retrospective date, as he may deem fit, where registration has been obtained by means of fraud, wilful misstatement or suppression of facts: Provided that the proper officer shall not cancel the registration without giving the person an opportunity of being heard: Provided further that during the pendency of the proceedings relating to cancellation of registration, the proper officer may suspend the registration
It was well-settled that the Show Cause Notice is required to set out the relevant material to enable the noticee to meaningfully respond to the same.
It was observed that the Show Cause Notice was short of the requirements of the Show Cause Notice as it did not contain any specific allegation that could be addressed with a meaningful response from the petitioner.
A two-judge bench comprising Justice Vibhu Bakhru and Justice Amit Mahajan set aside the impugned Show Cause Notice and quashed the order suspending the petitioner’s GST registration also stands quashed.
It was clarified that the respondents are not precluded from issuing an appropriate Show Cause Notice, setting out the reasons for proposing any adverse action against the petitioner.
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