Bombay High Court Quashes GST Registration Cancellation Without Proper Notice

The current case is titled Saurabh Sahu vs. The State of Maharashtra. The Bombay High Court gave its decision on July 01, 2025. The case is a Writ Petition (WP No. 8537 of 2025) where the petitioner, named Saurabh Sahu, challenged the cancellation of his GST registration by the State Tax Department under the Maharashtra Goods and Services Tax Act, 2017 (MGST Act).

Background of Case

• The State Tax Department cancelled the GST registrations done by the petitioner (Saurabh Sahu) on July 07, 2023. Before cancelling the GST registration, a show cause notice (SCN) was sent by the state to the petitioner on June 12, 2023, in which the state asked the petitioner to explain the reason why they should not cancel their GST registration. The SCN accused the petitioner of fraud or suppression of facts, which is a serious charge under Section 29(2)(e) of the MGST Act.
• However, the SCN was unclear, as the department only said that the registration was obtained by fraud or misstatement, but did not give any actual evidence or proof for that. Additionally, it did not mention the date or time of the hearing, which is normally a basic requirement. Seven days were given to the petitioner to reply to the SCN; however, the petitioner did not understand what he was supposed to reply.

Court’s Action

• The court, consisting of Justice M.S. Sonak and Justice Jitendra Jain, heard arguments from both sides. The petitioner was represented by Mr. Nirmal Pagaria, and the State Tax Department was represented by Ms. Shruti D. Vyas and Mr. Aditya R. Deolekar.
• The court agreed to the point that the SCN was too unclear. A person who receives a show cause notice (SCN) must clearly know the specific charges or allegations so that they can respond properly. Just mentioning “fraud” without saying what exactly was done wrong is not enough. Here, it was a mistake made by the State Tax Department.
• Interestingly, the lawyer of the State Tax Department, named Ms. Vyas, said that the actual details of the allegations were mentioned in an attachment, which was supposed to go along with the SCN. She claimed the petitioner did not include that attachment in the petition and tried to mislead the court.
• On this, the court gave the petitioner’s lawyer time to respond. In the next hearing, the petitioner’s lawyer displayed the screenshots of the government portal in the court, saying that such attachments were available when the SCN was issued. Meaning, the petitioner was never given the full details of the allegations.
• In response, Ms. Vyas then admitted there might be some technical glitch on the portal; otherwise, attachments were posted on the portal.

Court’s Decision

• As the show cause notice (SCN) was unclear and incomplete, the court ruled that, as the petitioner was not given a fair chance to defend himself because he did not know the exact allegations, the order has been cancelled.
• The order was cancelled on July 07, 2023. Additionally, the State Tax Department was asked to issue a fresh show cause to the petitioner, including all proper details, and to follow fair procedure.
• The department was given the time for two weeks to issue a fresh show cause notice.
• Moreover, the petitioner was given the same time for two weeks to answer the fresh SCN. The SCN was required to be sent via email to the petitioner at [email protected] and also to the GST official portal.
• All other arguments or claims are kept open; the court didn’t get into the merits of whether the cancellation was actually right or wrong, only that the process used was unfair.
• The State argued that the petitioner had delayed filing the petition (he filed in April 2025, even though the order was passed in July 2023) and that he should have gone through other remedies like revocation or appeal.
• However, the court explained that while there was a delay, no harm was done to the State, and no rights of others were affected due to this delay. So the delay wasn’t serious enough to reject the petition.

Final Order:

• The petition was permitted.
• The cancellation of the GST registration order was quashed due to an unclear and incomplete show cause notice.
• The tax department can start the process again properly.
• The case reinforces the idea that fair procedure and transparency are key in any legal or administrative action.