Delhi High Court sets aside GST Cancellation order passed in violation of Natural Justice

The reasons for cancellation of the petitioner’s GST registration is that he had not filed the returns for a period of six months. A show cause notice dated 02.09.2021 was issued to the petitioner calling upon it to show cause as to why its registration should not be cancelled. It is also important to note that the show cause notice dated 02.09.2021 called upon the petitioner to appear before the concerned officer on 02.10.2021 at 11 a.m.

It is not disputed that the petitioner had immediately on receipt of the show cause notice, addressed the cause and filed the returns by 14.09.2021. The petitioner was of the view that since he had addressed the cause for which adverse action was proposed the same would not follow.

Notwithstanding the above, the petitioner’s registration was cancelled by an order dated 15.02.2022.

It is relevant to note that no personal hearing was afforded to the petitioner as 02.10.2021 was a national holiday.

In the given facts, it is clear that the order dated 15.02.2022 has been passed in violation of the principles of natural justice and is requires to be quashed.

Mr. Ojha, learned counsel for the respondent submits that it would be necessary for the petitioner also to pay the outstanding interest to regularise his account with the GST authorities. He states that the notice dated 01.11.2022 was issued to the petitioner to pay an amount of Rs. 7,71,270/-. The learned counsel for the petitioner states that the petitioner has been attempting to pay the said amount but has been unsuccessful as the portal has not accepted any payment above Rs. 80,000/-, which the petitioner has paid. He also states that input tax credit in excess of Rs. 15,00,000/-, is lying in its register and the same can be utilised for the payment of any outstanding dues.

High Court Decision:

7. The scope of the present petition is limited to the action of the respondents in cancelling the petitioner’s GST registration. It is, thus, not necessary for this Court to examine whether there has been any other default on the part of the petitioner or whether sufficient opportunity has been provided to the petitioner to rectify the same. Since it is apparent that the order dated 15.02.2022 cancelling the petitioner’s GST registration was passed in the violation of the principles of natural justice, the said order is liable to be set aside.

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