My Trading Overseas Vs Commissioner

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Issue notice.

2. Mr. Aggarwal, learned counsel appearing for the respondent accepts notice.

3. The petitioner has filed the present petition impugning an order dated 11.2023 (hereafter ‘the impugned order’) whereby the petitioner’s GST registration was cancelled. The impugned order was passed pursuant to a show cause notice dated 05.04.2022 (hereafter ‘the impugned SCN’) whereby the petitioner’s GST registration was proposed to be cancelled for the following reasons: –

“1 In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts.”

4. The petitioner was directed to file a reply to the impugned SCN within a period of seven working days and to appear before the concerned officer on 04.2022 at 12.00 pm. Additionally, the petitioner’s GST registration was suspended with effect from the said date, that is, 05.04.2022.

5. The petitioner responded to the impugned SCN on 06.04.2022, inter alia, stating that the registration was obtained by uploading all required documents, however, due to size restriction, the documents uploaded were The petitioner further stated that it was ready to upload all the documents once again, if required and requested the concerned officer to restore its GST registration, which was suspended.

6. It is apparent from the above that the impugned SCN was bereft of any particulars. It did not clearly set out any specific reason for proposing to cancel the petitioner’s GST registration. It did not set out any particular allegation of fraud or wilful misstatement allegedly It provided no clue as to the facts allegedly suppressed by the petitioner.

7. This Court has, in a number of decisions, pointed out that such show cause notices, which do not set out the reason for proposing to cancel the taxpayer’s GST registration and are incapable of eliciting any meaningful response, are liable to be set aside. It is settled law that the purpose of the show cause notice is to enable the noticee to respond to the allegations, which in turn enables the concerned authority to take an informed decision.

8. The impugned SCN does not satisfy the rudimentary requirement of a show cause In view of the above, the impugned order is void as having been passed in violation of the principles of natural justice. This is because the petitioner had no opportunity to respond to any allegation. The impugned order has been passed without affording the petitioner any opportunity to meet the allegations against it.

9. The impugned order is also not informed by reason as it does not set out any ground for cancelling the petitioner’s GST registration, save and except mentioning that it is pursuant to the impugned SCN. It is noted that there is a space for filling up the reasons, however, that space has been left blank.

10. In view of the above, the impugned order as well as the impugned SCN are set aside. The respondent is directed to forthwith restore the petitioner’s GST registration. It is clarified that this would not preclude the concerned authorities from initiating fresh proceedings albeit in accordance with the law.

11. Order Dasti. 

12. The petition is disposed of in the aforesaid Pending application is also disposed of.