IMPORTANT POINT
Cancellation of GST registration must follow due process, including a clear show-cause notice and a reasoned order, to uphold the principles of natural justice.

JUDGMENT :

Hon'ble Ajay Bhanot, J.-Heard Shri Vishwas Pandey, learned counsel and Shri Mahesh Dwivedi, learned counsel for the petitioner, Shri Naveen Chandra Gupta, learned Central Counsel for the respondent Nos. 1 and 2-Union of India and Shri Rishi Kumar, learned Additional Chief Standing Counsel for the State.

2. The petitioner in the writ petition is aggrieved by the impugned order ref. No. ZA090722077658X dated 13.7.2022 which cancels the GST registration under the GST Act.

3. The appeal of the petitioner has been rejected on grounds of limitation by the impugned order ref.No. ZD091023027190Y dated 6.10.2023 passed by the respondent No. 4.

4. The petitioner is also aggrieved by the show-cause notice ARNZA090622139048H dated 20.6.2022 passed by the respondent No. 5.

5. Shri Vishwas Pandey, learned counsel and Shri Mahesh Dwivedi, learned counsel for the petitioner submit that :

I. The action of the authorities cancelling the GST registration of the petitioner is arbitrary and illegal.

II. The order of cancellation of GST registration virtually compels the petitioner to shut down his business.

III. The order is non-speaking and reflects non application of mind despite visit the petitioner with severe penalties.

6. Shri Rishi Kumar, learned Additional Chief Standing Counsel submits that :

I. The petitioner failed to submit a reply to the show-cause notice. Hence, no speaking order is required.

II. The petitioner can continue his business only in accordance with law and cannot complain if the registration certificate has been cancelled in the manner aforesaid.

7. Heard learned counsel for the parties.

8. The petitioner is engaged in the business of sale of scrap items. He has obtained a GST registration under the GST Act. The show-cause notice was issued to the petitioner proposing to cancel the registration of the petitioner dated 20.6.2023. The recitals in the show-cause notice disclosed that the GST registration of the petitioner was liable to be cancelled as the principal place of business was not found/available at the time of field visit. Admittedly, the petitioner could not tender his reply to the show-cause notice for various reasons beyond his control.

9. The show-cause notice is vague and lacks material particulars. The time and place of the field visit are not disclosed in the show-cause notice nor the details of the officials who allegedly conducted the visit have been provided therein. The lack of material particulars in the show-cause notice vitiates the same and the proceedings were liable to be dropped. The report of the officials who had allegedly visited the site of business has not been appended to the show-cause notice nor was supplied to the petitioner.

10. Further, the petitioner was directed to appear for tendering his reply to the show-cause notice dated 20.6.2022. Though the seven days time was granted for the reply, the matter was fixed before the authorities on 22.6.2022.

11. The time period is too short and is not sufficient for any noticee to tender an effective and complete defence of his case. On both these grounds the show-cause notice is vitiated and the proceedings in pursuance thereof are also liable to be set aside on this ground alone. The cancellation order dated 13.7.2022 is a non speaking order. It does not reflect any application of mind. Both the grounds go to the route of the jurisdiction of the authorities.

12. The narrative shall now be fortified by good authorities in point. The issue has been settled by authoritative pronouncements of this Court. Pankaj Bhatia, J. in M/s Chandra Sain, Sharda Nagar, Lucknow Thru. Its Proprietor Ms. Chandra Sain v. U.O.I. Thru. Secy. Ministry of Finance, New Delhi and 5 others, Writ Tax No. 147 of 2022, while delineating the duties of the noticing authority and process to be followed prior to cancellation of a licence and also the consequences of such cancellation held as under:

''6. Learned counsel for the petitioner argues that although no fault can be found wi