A show cause notice must provide sufficient factual details to comply with principles of natural justice; otherwise, it renders subsequent orders invalid.

ORDER: (Per the Hon’ble the Acting Chief Justice Sujoy Paul)

Sri Vedantam Sriramnivas, learned counsel appearing for Sri V.Raghunadh, learned counsel for the petitioner and Sri T. Chaitanya Kiran, learned Assistant Government Pleader representing Sri Swaroop Oorilla, learned Special Government Pleader for State Tax appearing for the respondents.

2. With the consent, finally heard.

3. In this writ petition the show cause notice for cancellation of registration of the petitioner dated 28.03.2023, the order dated 24.04.2023 cancelling the registration and the appellate order dated 09.08.2024 rejecting the petitioner’s appeal are called in question.

4. The principal argument of the learned counsel for the petitioner is that the show cause notice is cryptic in nature and it does not contain any factual details and only pregnant with reproduction of the provision on the strength of which action can be taken. Thus, the show cause notice is vague in nature. The order of cancellation dated 24.04.2023 is assailed by contending that in the first line, it is stated that the order was in reference to the petitioner’s reply dated 13.04.2023 in response to the show cause notice dated 28.03.2023 and in the second line, it is mentioned that no reply was filed. Thus, there exists a procedural infirmity and violation of principles of natural justice. The appellate order is also under challenge.

5. Learned Special Government Pleader for State Tax submits that as per Section 107 of the Central Goods and Services Tax Act, 2017, the appeal must be filed within ninety days and the appellate authority can condone the delay for thirty more days, whereas in the present case, the petitioner filed appeal beyond four months. Thus, we do not find any error in the appellate order dated 09.08.2024.

6. However, the fact remains that the appellate authority has not decided the appeal on merits. The impugned show cause notice certainly is cryptic in nature and does not contain necessary factual details.

7. In W.P.No.17400 of 2024, this Court at relevant paragraphs opined as under:

“6. The singular reason assigned in the impugned notice dated 29.02.2024 reads asunder:

“1. Section 29(2)(e)-registration obtained by means of fraud, willful misrepresentation or suppression of facts”.

Apart from this bald statement, there exists nothing in the show cause notice which can throw light as to what is the nature of ‘fraud’ or ‘willful misrepresentation’ or ‘suppression of fact’ by the petitioner. Thus, show cause notice is cryptic and an example of non application of mind. In absence of factual basis and necessary details, notice becomes vulnerable.

7. This Court, recently, considered this aspect in T S R Exports (supra) and held as under:

“9. We find subsistence in the argument of the learned counsel for the petitioner that the factual backdrop or the reason on the strength of which, conclusion of fraud or misstatement or suppression of facts was drawn is totally absent in the show cause notice. The show cause notice, in our considered opinion, should spell out the factual backdrop of breach, on the strength of which the department has rejected and concluded that Section 29 (2) (e) of the Act, can be invoked. If minimum factual backdrop and nature of breach is not mentioned with accuracy and precision, the petitioner was not in a position to file reply.

10. The Apex Court expressed the need of issuance of such notice in Canara Bank vs. Debasis Das [2003] 4 SCC 557, at para No.15, which reads as under:

“15. ...Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. Th