Gujarat High Court quashes GST SCN for cancellation of registration issued without reasons: HC

Gujarat High Court in the matter of SARVODAY IMPEX Versus UNION OF INDIA quashed and set aside another cryptic GST show-cause notice issued to the concerned petitioner for cancellation of registration.

The petitioner is registered under Central Goods and Service Tax Act, 2017 (hereinafter referred to as ‘the Act’). It is submitted that on 06.01.2023 a showcase notice in Form of GST REG-17/31 came to be issued by the respondent authorities while exercising power under Section 29 of the Act read with Rule 22(1) of the Central Goods and Services Tax Rules, 2017. It is also submitted that the show-cause notice simply states the reason for issuance of notice (as in case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts).

Learned advocate Mr.Nanavati further submitted that the said show-cause notice is as vague as possible and does not refer to any particular facts much less point out so as to enable the noticee to give its reply. Therefore, he urges before this Court to quash and set aside the impugned show-cause notice issued by the respondents which is placed on record at page 18 of the compilation.

Learned advocate Mr.Nanavati has relied on the various decisions of the Hon’ble Supreme Court as well as other High Courts. He has placed reliance on the decision of this Court rendered in the case of Aggrawal Dyeing and Printing Works Vs. State of Gujarat & Ors passed in Special Civil Application No.18860 of 2021 decided on 24.02.2022 and allied matters.

Learned advocate Mr. Nanavati has also placed on record the order passed by this Court in Special Civil Application No.11262 of 2020, Special Civil Application No.25205 of 2022, Special Civil Application No.7328 of 2022 and Special Civil Application No.5480 of 2022. It is submitted that in similar type of cases, this Court has quashed and set aside the similar show-cause notice issued by the respondent authorities. Therefore, he urges before this Court to allow the present petition and quash and set aside the impugned show-cause notice.

On the other hand, Mr. C.B.Gupta, learned advocate for the respondents has referred the averments made in the Affidavit-in-reply filed on behalf of the respondents. Mr.Gupta, learned advocate has tried to argue the case of the respondents on merits. However, it is pertinent to note that in the show-cause notice issued to the petitioner, detail with regard to the alleged fraud and illegality committed by the petitioner has not been stated. It is stated in the reply that the impugned showcase notice for cancellation of registration of the petitioner has been issued through common portal and there is no facility or mechanism to upload other documents while issuing system based show-cause notice through common portal. Therefore, he contended that because of the said technical glitch, the details are not provided to the petitioner in the show-cause notice.

Gujrat High Court:

[13] From the aforesaid order, it reveals that, in the said case as similar type of contentions were raised on behalf of the respondent. However, this Court has quashed and set aside the similar type of show-cause notice issued to the concerned petitioner for cancellation of registration. We are of the view that the present matter is squarely covered by the aforesaid order passed by this Court, therefore, the impugned show-cause notice deserves to be quashed and set aside on the similar grounds.

[14] In view of the aforesaid facts and reasons, the present petition is allowed. The impugned show-cause notice dated 06.01.2023, being without reasons, is cryptic and deserves to be quashed and set aside, and is hereby quashed and set aside. However, liberty is granted to the respondent authorities to issue fresh notice with particulars of reasons incorporated with details and thereafter to provide reasonable opportunity of hearing to the petitioner and to pass appropriate order in accordance with law. The concerned respondent is hereby directed to restore the registration of the petitioner forthwith.

[15] It is needless to mention that it shall be open for the petitioner to respond to such notice by filing objection/reply with necessary documents, if relied upon.

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