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2023 Supreme(All) 2628
IN THE HIGH COURT OF ALLAHABAD
SAUMITRA DAYAL SINGH, SHIV SHANKER PRASAD, JJ.
Hindustan Paper Machinery Industries - Petitioner
Versus
Commissioner Cgst and 2 Others - Respondents
WRIT TAX NO. 1047 OF 2023.
Decided On : 08-11-2023
For the Petitioner: Gaurav Dwivedi, Gaurav Dwivedi, Nishant Mishra.
For the Respondent: Gaurav Mahajan, Gopal Verma.
Important Points
Subject
Taxation - Goods and Services Tax
Act Referred
Headnote
(B) Principle of Natural Justice - An adverse conclusion cannot be drawn against the petitioner without factual allegations in the notice. Vague replies cannot render a decision if no clear accusations are outlined in the notice. (Paras 9, 12)
Facts of the case:
The petitioner’s registration was canceled citing issuing invoices without supply of goods or services. The petitioner argued ongoing investigations could affect this conclusion, requesting to keep the cancellation in abeyance.
Findings of Court:
The order lacked reasons for the cancellation and thus did not withstand legal scrutiny; the court instructed a fresh notice to be issued, allowing the petitioner to respond.
Issues: Whether a cancellation order without clear factual basis violates principles of natural justice.
Ratio Decidendi: The court ruled that the cancellation order was invalid due to the absence of concrete factual allegations in the show-cause notice, affirming the necessity of due process.
Result: Writ petition disposed of with directions for the issuance of a fresh show-cause notice.
| Table of Content |
|---|
| 1. petitioner's registration cancellation process overview. (Para 1 , 2 , 5 , 6 , 7) |
| 2. existence and inadequacy of statutory alternative remedy. (Para 3 , 4) |
| 3. violation of natural justice in the cancellation order. (Para 8 , 9 , 10 , 11) |
| 4. court's directive on registration suspension and future proceedings. (Para 12 , 13 , 14 , 15) |
JUDGMENT
Heard Sri Nishant Mishra, Advocate alongwith Sri Gaurav Dwivedi, learned counsel for the petitioner and Sri Gaurav Mahajan, learned standing counsel for the respondents. In undisputed facts as to the conduct of the proceedings, the writ petition is being disposed of finally, without calling for counter affidavit.
2. Present writ petition has been filed against the order dated 9.8.2023 passed by the Superintendent, CGST Range14, Division IIIrd, Ghaziabad. By that order the said authority has cancelled the registration of the petitioner under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the Act').
3. At the outset, learned counsel for respondent has raised preliminary objection as to existence of statutory alternative remedy.
4. Undeniably, such remedy exists. However in the peculiar facts of the present case, that remedy is found to be wholly inadequate.
5. Admittedly the petitioner had obtained registration under the Act. He was issued show-cause notice dated 23.3.2023 seeking to cancel that registration. For ready reference that notice reads as below:-
" Form GST REG-17
[See Rule 22(1)/sub-rule (24) of rule 214)
| Reference Number: ZA090323172736B | Date: 23/03/2023 |
Date: 23/03/2023
To
Registration Number (GSTIN/Unique ID): 09AADFH475INIZZ
Hindustan Paper Machinery Industries
138,B. S. Road, Industrial Area, Ghaziabad, Uttar Pradesh, 201001
Show Cause Notice for Cancellation of Registration
Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:
1. Issues any invoice or bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of input tax credit or refund of tax.
You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice.
You are hereby directed to appear the undersigned on 28/03/2023 at 03:28 PM
If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.
Please note that your registration stands suspended with effect from 23/03/2023
Place: Uttar Pradesh
Date: 23/03/2023"
6. The petitioner responded to the notice vide its reply dated 28.3.2023. It read as below:-
"To,
28/03/2023
DC/AC
Div- III, G 2B
Goods and Service Tax Department,
Ghaziabad.
Reg: M/S. Hindustan Paper Machinery Industries, C-138, B.S Road Ind. Area, Ghaziabad.
GSTN: 09AADFH4751N1ZZ
Sub: Reply to Show cause notice for Cancellation of registration
Sir,
This is with regard to your show cause notice ZA0903231727368 dt.23/03/2023 which has been issued for the reason as given under:
Issue any invoice or Bill without supply of goods and/or services in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilization of Input Tax credit or refund of tax.
In this regard the assessee has to state that there was a survey conducted by the DGGI, Delhi on 03/02/2023. The assessee's case is under investigation and the matter has not been finalized by the DGGI, Delhi.
Also it is stated that the assessee has also approached the Hon'ble High court vide writ petition no. W.P.(C) 3752/2023. And the matter is sub judice at this moment.
Thus it is requested to keep the suspension of Registration in abeyance till the investigation with the DGGI, Delhi is not completed and the order of Writ is not delivered by the Hon'ble High Court.
Than
