Department cannot cancel Taxpayer's GST Registration in one line: High Court

Big Relief for TaxPayers-

High Court has given this verdict in an arbitrary order passed by GST Department for cancellation of GST Registration of a taxpayer. In this case, GST Department issued just one line notice and order to cancel the GST Registration. Taxpayer was issued a show cause notice dated 09.08.2023 asking the petitioner to show cause -

Why the petitioner’s registration should not be cancelled for the reason ‘Section 29(2)(e) - registration obtained by means of fraud or willful misstatement or suppression of facts.’

And later, department cancelled the registration vide order dated 05.10.2023 by simply giving reference to above Show Cause Notice.

High Court:

While giving the verdict, High Court said that the department will have to give accurate information as to what kind of misrepresentation, fraud or attempt to hide the facts has been committed by the businessman while taking the GST number.

Though clause (e) of sub-section (2) of Section 29 of the GST Act is extracted in the show cause notice, neither in the show cause notice nor the impugned order, it is not made clear what kind of fraud, willful misstatement or suppression of fact were there at the time of granting GST registration to the petitioner. The impugned order is wholly a non-speaking order. As such, the order is unsustainable in law.

Giving relief to the petitioner, the court ruled that the department cannot do this.

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Cancellation of GST Registration

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GST Registration

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