Telangana HC quashes GST Registration Cancellation passed on Suo Moto Powers without Granting Opportunity of Hearing [Read Order]

Telangana - HC - GST - Registration - Cancellation - opportunity - TAXSCAN

The Telangana High Court Bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramjiquashed Goods and Service Tax (GST) Registration Cancellation passed on suo moto powers without granting opportunity of hearing.

The Petitioner, Sheeshmahal Enterprises, is a limited company engaged in the business of motion picture projection services.

By filing this petition under Article 226 of the Constitution of India, petitioner has assailed legality and validity of the order passed by respondent No.1 and the order-in-appeal passed by the respondent No.2.By the first orderGST Registration of the petitioner was cancelled whereas by the second order, the appeal filed by the petitioner against such cancellation of GST registration was rejected.

Show cause notice was issued by respondent No.1 to the petitioner to show cause as to why its GST registration should not be cancelled for non-submission of returns for the last six months.

According to the petitioner, because of COVID-19 situation, it could not file the GST returns. But in so far the show cause notice is concerned, it is stated that petitioner did not receive the said show cause notice and therefore, could not submit any reply. However, respondent No.1 recorded that he had considered the reply of the petitioner but found the same to be not satisfactory. Therefore, the impugned order was passed cancelling the GST registration of the petitioner.

Appeal filed by the petitioner before respondent No.2 was rejected on the ground of delay.

The Bench observed that “When petitioner has made a submission on oath that it did not receive the show cause notice and therefore could not submit any reply, we fail to understand as to how respondent No.1 could have recorded in the impugned order that petitioner had submitted reply and that he had considered the said reply. This only goes to show the mechanical approach adopted by respondent No.1 and reflects non-application of mind.”

“Be that as it may, since the GST registration of the petitioner has been cancelled in exercise of suo motu powers by respondent No.1, we are of the view that it would meet the ends of justice if the exercise is redone by giving an opportunity to show cause and hearing to the petitioner” the Court said.

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