Bombay High Court Quashes GST Registration Cancellation Due to Vague Show Cause Notice

The petitioner filed an appeal challenging a registration cancellation order dated 07.07.2023 under the Maharashtra Goods and Services Act, 2017. As per the show cause notice, which was issued before this order, the registration of the petitioner is cancelled under section 29(2)(e)– registration obtained by means of fraud, wilful misstatement or suppression of facts.

High Court’s Observation

The high court called the show cause notice dated 12 June 2023, vague. The court observed that the SCN only mentioned that the registration was cancelled due to fraud and misstatement, but it did not mention what the alleged fraud, misstatement or suppression of facts was. A noticee shall be informed of what the violation was so that he/she can reply effectively.

Also in the SCN, the petitioner was directed to file a reply within the given time period and also that if the petitioner did not appear for a personal hearing, it would result in passing ex parte order. However, the date and time were missing in the SCN.

The respondent claimed that there was an attachment, which was part of this show cause notice and that this attachment had the details of the allegations. However, the Petitioner showed screenshots that no such attachment was available on the GST portal.

The respondent claimed that there may have been a technical glitch due to which the attachment did not show on the GST portal. Therefore, the court considered that the petitioner only received the show cause notice that was vague, due to which the petitioner could not have replied to the notice.

Court’s Final Decision

• The Court quashed the cancellation order dated 7 July 2023, due to a violation of natural justice.
• The respondent was given liberty to issue a fresh show cause notice following the principles of natural justice and fair play.
• The Petitioner’s learned counsel stated that the Petitioner will respond within two weeks of receiving the new notice.