IMPORTANT POINT
Show cause notices must specify reasons for adverse actions to comply with natural justice principles, and vague reasons for rejecting revocation applications are unsustainable.

JUDGMENT

Vibhu Bakhru, J.

1.  Issue notice.

2.  Ms. Narain, learned counsel appearing for the respondents, who has joined the proceedings through video conference accepts notice and states that it is necessary to implead the Jurisdictional Commissioner (Commissioner, CGST, North) in this petition. On an oral request, Commissioner, CGST, North is impleaded as a respondent. The petitioner shall file an amended memo of parties within a period of two working days.

3.  Ms. Narain accepts notice on behalf of the respondents, including on behalf of the newly impleaded respondent. With the consent of the parties, the petition has been finally heard.

4.  The petitioner has filed the present petition impugning an order (Order-in-Appeal No.140/ADC/Central Tax/Appeals-1/Delhi/2023) dated 23.05.2023 whereby, the petitioner's application for revocation of the cancellation of his GST registration, was rejected.

5.  The petitioner was registered with the GST authorities on 05.02.2020 and allocated GSTIN/UNIQUE ID: 07AIOPU4857B1ZV. The petitioner claims that on 14.03.2020, the petitioner opened a bank account with AU Small Finance Bank Ltd. and uploaded the details of the same on the GST portal.

6.  Thereafter on 05.12.2021, the Proper Officer issued a show cause notice proposing to cancel the petitioner's GST registration for the following reason:

"1. Non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed."

6.1.  The petitioner's GST registration was suspended and he was called upon to furnish a reply to the show cause notice within a period of seven working days and appear before the Proper Officer on 08.12.2021.

7.  As is apparent from the above that the show cause notice did not provide any clue as to the reason for proposing cancellation of the petitioner's GST registration. This Court has in a number of decisions, held that such show cause notices, which do not specifically state the reason for proposing adverse actions cannot be sustained. The purpose of the show cause notice is to enable the noticee to respond to the allegations. Since the said show cause notice is incapable of eliciting any meaningful response, it does not meet the standards required for a show cause notice. Any order passed pursuant to such a show cause notice would fall foul of the principles of natural justice.

8.  The Proper Officer proceeded to cancel the petitioner's GST registration by an order dated 03.01.2022 on the ground that the petitioner had not uploaded the bank details as evident from the response form. It is also material to note that the petitioner's GST registration was cancelled with retrospective effect from 06.02.2020. The tabular statement set out in the said order dated 03.01.2022 indicates that no tax or penalty is due from the petitioner.

9.  Aggrieved by the same, the petitioner filed an application for revocation of the cancellation order. The petitioner also sent emails, once again, setting out the details of his bank accounts. The petitioner also asserted that the same were uploaded on the GST portal prior to issuance of the show cause notice dated 05.12.2021.

10.  Pursuant to the said application for revocation of cancellation, the Proper Officer issued a show cause notice dated 28.02.2022 proposing to reject the petitioner's application for the following reason:

"1 Reason for revocation of cancellation - Reason for revocation of cancellation - The reason entered for revocation of cancellation is not appropriate."

11.  As is apparent from the above, the reasons for proposing to reject the petitioner's application are vague and unintelligible. This Court is at loss to understand the reason for proposing to reject the petitioner's application as articulated by the Proper Officer.

12.  To add insult to injury, the petitioner's application for revocation of cancellation of the GST registration was rejected on the ground that the petitioner had not replied to the show cause notice within the time specifi