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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Sachdeva, Ravinder Dudeja, JJ.
M/s Singh Trading Co. - Appellant
Versus
Sales Tax Officer Class-ii/avato, Ward 79 Zone 7 Delhi - Respondent
W.P.(C) 1179 of 2024
Decided On : 27-02-2024
GST Registration - Cancellation - The court set aside the impugned order of cancellation of GST registration due to lack of proper notice and failure to provide supporting material to the petitioner. The Proper Officer was directed to furnish all material in support of the show cause notice to the petitioner within one week, and the petitioner was given the opportunity to file a reply and for re-adjudication.
Fact of the Case:
The petitioner challenged the order cancelling their GST registration, citing lack of proper notice and failure to provide supporting material. The petitioner was called upon to submit a reply but did not, and the show cause notice did not mention a date, time, or venue for appearance.
Finding of the Court:
The court set aside the impugned order and directed the Proper Officer to furnish all material in support of the show cause notice to the petitioner within one week. The petitioner was given the opportunity to file a reply, and the Proper Officer was directed to re-adjudicate the show cause notice within a maximum period of two weeks after giving an opportunity of personal hearing to the petitioner.
Issues: Proper notice and provision of supporting material for cancellation of GST registration.
Ratio Decidendi: Lack of proper notice and failure to provide supporting material led to the court setting aside the cancellation order and directing the Proper Officer to furnish all material in support of the show cause notice to the petitioner.
Final Decision: The impugned order of cancellation of GST registration was set aside, and the Proper Officer was directed to re-adjudicate the show cause notice after providing the petitioner with the necessary material and an opportunity to file a reply.
JUDGMENT
Sanjeev Sachdeva, J. (Oral) - Petitioner impugns order dated 19.09.2023, whereby, the GST registration of the petitioner has been cancelled. Said cancellation order was issued pursuant to a show cause notice for cancellation dated 20.07.2023.
2. The reason mentioned in the show cause notice for proposed cancellation was:
"The Addl. Commissioner of State Tax-1 (Inv) vide letter No. PA/Addl./CST-01/446-448 dated 17-07-2023 has inform that the firm is involved in a big scam of evasion of tax."
3. Petitioner was thereupon called upon to submit a reply, however, no reply was submitted by the petitioner.
4. As per the petitioner, neither the copy of letter of the Additional Commissioner dated 17.07.2023, referred to in the show cause notice was provided, nor any further information was provided. Petitioner was called upon to appear on the date and time notified in the show cause notice, however, the show cause notice does not mention any date, time or venue where the petitioner had to appear.
5. As per the respondents, there is material available to establish that the petitioner firm was involved in big scam of evasion of tax. However, it is conceded that the said material has not been provided to the petitioner in support of the show cause notice.
6. In view of the above, impugned order dated 19.09.2023 is set aside. Proper Officer is directed to furnish all material that the Proper Officer may have in support of the show cause notice to the petitioner within one week from today. Thereafter, petitioner shall file a reply thereto within one week. The Proper Officer shall thereafter re-adjudicate the show cause notice within a maximum period of two weeks after giving an opportunity of personal hearing to the petitioner.
7. Petition is accordingly disposed of in the above terms.
8. Needless to state that petitioner shall be entitled to avail of such remedies as permissible in law if aggrieved by any order/action of the respondents.
Proper notice and provision of supporting material are essential for the cancellation of GST registration.
Proper adjudication process and consideration of petitioner's reply before passing an order.
Cancellation of GST registration with retrospective effect must be based on objective criteria and proper reasoning.
Cancellation of GST registration with retrospective effect must be based on objective criteria and proper notice, and the proper officer must consider all relevant aspects before passing such orders.
A Show Cause Notice must specify the reasons for proposed action to enable a meaningful response, and decisions must provide an opportunity to be heard and indicate alleged statutory violations.
Cancellation of registration with retrospective effect must be based on objective criteria and supported by reasoning and particulars in the show cause notice and impugned order. The petitioner must ....
Cancellation of GST registration with retrospective effect should be based on objective criteria and warranted consequences, and the respondents are not precluded from taking steps for recovery of an....
Clarity in show cause notices and consideration of petitioner's submissions are essential in GST registration cancellation proceedings.
The cancellation of the petitioner's GST registration was set aside due to violation of principles of natural justice and lack of specific details in the show-cause notice and impugned order.
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