A show cause notice that does not set out the reason for proposing to cancel the taxpayer's GST registration and is incapable of eliciting any meaningful response is liable to be set aside.

W.P.(C) No.15317/2023

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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W.P.(C) 15317/2023 & CM APPL. 61392/2023

M/S MY TRADING OVERSEAS

..... Petitioner

Through:

Mr. Pulkit Verma & Peyush Pruthi,

Advs.

Versus

COMMISSIONER DELHI GOODS AND SERVICE

TAX

..... Respondents

Through:

Mr. Rajeev Aggarwal, ASC.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE AMIT MAHAJAN

VIBHU BAKHRU, J.

1.

Issue notice.

2.

Mr. Aggarwal, learned counsel appearing for the respondent

accepts notice.

3.

The petitioner has filed the present petition impugning an order

dated 22.11.2023 (hereafter ‘the impugned order’) whereby the

petitioner’s GST registration was cancelled. The impugned order was

passed pursuant to a show cause notice dated 05.04.2022 (hereafter ‘the

impugned SCN’) whereby the petitioner’s GST registration was

proposed to be cancelled for the following reasons: -

“1

In case, Registration has been obtained by means of

fraud, wilful misstatement or suppression of facts.”

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:07.12.2023

Signature Not Verified

W.P.(C) No.15317/2023

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4.

The petitioner was directed to file a reply to the impugned SCN

within a period of seven working days and to appear before the

concerned officer on 07.04.2022 at 12.00 pm. Additionally, the

petitioner’s GST registration was suspended with effect from the said

date, that is, 05.04.2022.

5.

The petitioner responded to the impugned SCN on 06.04.2022,

inter alia,stating that the registration was obtained by uploading all

required documents, however, due to size restriction, the documents

uploaded were blurred. The petitioner further stated that it was ready to

upload all the documents once again, if required and requested the

concerned officer to restore its GST registration, which was suspended.

6.

It is apparent from the above that the impugned SCN was bereft

of any particulars. It did not clearly set out any specific reason for

proposing to cancel the petitioner’s GST registration. It did not set out

any particular allegation of fraud or wilful misstatement allegedly

made. It provided no clue as to the facts allegedly suppressed by the

petitioner.

7.

This Court has, in a number of decisions, pointed out that such

show cause notices, which do not set out the reason for proposing to

cancel the taxpayer’s GST registration and are incapable of eliciting any

meaningful response, are liable to be set aside. It is settled law that the

purpose of the show cause notice is to enable the noticee to respond to

the allegations, which in turn enables the concerned authority to take an

informed decision.

8.

The impugned SCN does not satisfy the rudimentary requirement

of a show cause notice. In view of the above, the impugned order is void

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:07.12.2023

Signature Not Verified

W.P.(C) No.15317/2023

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as having been passed in violation of the principles of natural justice.

This is because the petitioner had no opportunity to respond to any

allegation. The impugned order has been passed without affording the

petitioner any opportunity to meet the allegations against it.

9.

The impugned order is also not informed by reason as it does not

set out any ground for cancelling the petitioner’s GST registration, save

and except mentioning that it is pursuant to the impugned SCN. It is

noted that there is a space for filling up the reasons, however, that space

has been left blank.

10.

In view of the above, the impugned order as well as the impugned

SCN are set aside. The respondent is directed to forthwith restore the

petitioner’s GST registration. It is clarified that