Cancellation of GST Registration by a vague, non-speaking and cryptic order set aside by High Court

The applicant was served a show cause notice issued by the Assistant Commissioner, which simply states the reason for issuance of the notice, read as under:

“Issues any invoice or bills without supply of goods and/or services in violation of the provisions of this Act, or the rules thereunder leading to wrongful availment of input tax credit or refund of tax.”

The applicant submitted its reply within the time period granted in the said notice questioning the authority of the Assistant Commissioner, to initiate proceedings for cancellation of registration.

It is the case of the writ applicant that in absence of proper intimation by the respondent authority, the writ applicant on his own appeared before the concerned Officer thereby drawing attention about the objections raised by the writ applicant. However, the Assistant Commissioner, without considering the objections raised by the writ applicant, passed the order dated 18.01.2022 cancelling the registration of the writ applicant firm. The sole reason assigned by the Assistant Commissioner in the said order of cancellation reads thus:

“1. No clarification against SCN is submitted. So cancellation order u/s 29 read with rule 21 for cancellation of GSTN wef 10.09.2020 is send by RPAD bearing o/w no. 4828 dated 18.01.2022”

Being aggrieved by the aforesaid illegal action of the respondent authority cancelling the registration of the writ applicant firm, the writ applicant has approached this Court by way of present writ application.

Held:

On bare perusal of the contents of the show cause notice as well as the impugned order, we find that the said show cause notice is absolutely vague, bereft of any material particulars and the impugned order is also vague and a non-speaking order.

It cannot be disputed that with cancellation of registration, the dealer is liable to both civil and penal consequences. To say the least, the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done.

Not only the order is non-speaking but cryptic in nature and the reason of cancellation not decipherable there from. In such circumstances, the Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences.

We therefore, quash and set aside the show cause notice and order. 

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Cancellation of GST Registration

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