The Delhi High Court set aside cancellation of GST Registration on the ground of violation of natural justice principles.
The petitioner, M/s Aaira Batteries, has filed the present petition, inter alia, impugning an order dated 20.09.2021 (‘the impugned order’), whereby the petitioner’s Goods and Service Tax (‘GST’) registration was cancelled. The petitioner prays that the respondent be directed to restore the same. The petitioner was registered with the GST authorities on 01.09.2018 and was assigned Goods and Service Tax Identification Number.
The petitioner was also called upon to furnish a reply to the aforesaid notice, within a period of seven working days and to appear before the concerned Officer. Additionally, the petitioner’s registration was suspended with effect from the date of the said notice, that is, with effect from 25.08.2021. Although, the petitioner was called upon to appear before the concerned Officer, the aforesaid show cause notice neither indicated the venue nor the date and time when the petitioner was required to appear.
It is also apparent that, although an allegation was made that the petitioner had issued invoices and bills without supply of goods, in violation of the provisions of the Act, the show-cause notice did not mention any specific invoices or bills. It also did not provide any other details such as the period during which such invoices were issued, which could identify the bills alleged to have been raised without supply of goods.
Pursuant to the show-cause notice, the respondent proceeded to cancel the petitioner’s GST registration by the impugned order. The said order did not specify any reasons for cancellation of the petitioner’s GST registration except mentioning that no reply to the aforementioned show-cause notice was received.
A Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that “We are of the view that the said show-cause notice is bereft of the necessary particulars so as to enable the petitioner to respond to the same with any clarity. Further, the petitioner was not afforded any opportunity of being heard. This is because, even though the show-cause notice called upon the petitioner to appear for a personal hearing, it did not specify the date, time or the venue of such hearing.”
“Although the petitioner has not approached this Court immediately after receiving the impugned order, we do not find that the delay is pernicious to the petitioner’s claim for restoration of the GST registration. As is apparent from the above, the impugned order cancelling the petitioner’s registration was passed in violation of the principles of natural justice and is, thus, liable to be set aside. The impugned order, cancelling the petitioner’s GST registration is set aside.” the Court concluded.
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