GST Registration cannot be cancelled without giving reasons for Cancellation

The Delhi High Court in the matter of GREEN POLYMERS Vs. UNION OF INDIA & ORS. has held that GST Registration cannot be cancelled without giving reasons for Cancellation.

The petitioner is an individual (holds GST No.07DCOPG1543MIZB) and carries on the business under a sole proprietorship concern named M/s Green Polymers. The petitioner claims that his principal place of business was located at H. No. A-34, Khasra No. 40/31, Ground Floor, Khera Garhi, Street No.4, New Delhi, 110082. On 16.05.2023, he had requested respondent no.2&3 to update his address in the records.

Thereafter on 19.05.2023, the petitioner was issued a show cause notice, inter alia, proposing to cancel its GST registration on the ground that it was obtained by ‘fraud, wilful misstatement or suppression of facts’. The petitioner contested the said show cause notice. However, without referring to any of the material, as provided by the petitioner, the respondents cancelled the petitioner’s GST registration by an order dated 15.06.2023. The petitioner immediately applied for revocation of the cancellation of the GST registration which was allowed by an order dated 26.06.2023, and the petitioner’s GST registration was restored.

Notwithstanding that the petitioner’s GST registration was restored on 26.06.2023; the respondent issued the impugned SCN on 30.06.2023 and once again cancelled the petitioner’s GST registration by the impugned order.

It is apparent from the impugned SCN that apart from alleging that the registration was obtain by fraud, wilful misstatement or suppression of facts which was also the ground on which the petitioners’ GST registration was cancelled in the earlier round – it does not indicate any specific reason(s) for proposing cancellation of the petitioner’s GST registration.

The impugned SCN is incapable of eliciting any meaningful response as it does not indicate as to what is the fraud allegedly perpetuated by the petitioner or the wilful misstatement allegedly made by the petitioner. It also does not indicate as to which material fact was suppressed by the petitioner. It is also not clear whether the petitioner’s GST registration is proposed to be cancelled on account of fraud or wilful misstatement or suppression of facts as all the three reasons are indicated.

In view of the above, the impugned order is set aside as it is not informed by reason. The impugned SCN is also set aside for the reasons stated above.

The petition is allowed in the aforesaid terms. The pending application is also disposed of.

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