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English | हिंदी | தமிழ்

Vague and non speaking order passed by officer for cancellation of GST Registration is not sustainable: High Court

By this writ application, the applicant has prayed to quash the show cause notice and order of cancellation of GST Registration passed by state tax officer.

Facts:

The applicant is registered under GST Act.

A show cause notice dated 14.02.2022 was issued by the State Tax Officer in Form GST REG-17/31 u/s 29 of the CGST Act, 2017.

The reason specified in the said show cause notice reads as under:

Show Cause Notice for Cancellation of Registration Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:

1. DEALER FOUND SUSPICIOUS. NO DOCUMENTS FOUND AT THE PLACE OF BUSINESS.

You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice.

If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.

Pursuant to the show cause notice, the writ applicant was required to submit his reply within a period of seven days, failing which, the case was to be decided ex-parte. On 22.02.2022, the State Tax Officer passed ex-parte order of cancellation of registration. The contents of the said order reads thus:

Order for Cancellation of Registration

This has reference to your reply dated 21/02/2022 in response to the notice to show cause dated 14/02/2022

Whereas no reply to notice to show cause has been submitted; Whereas on the day fixed for hearing you did not appear, The effective date of cancellation of your registration is 11/01/2022.

Held:

On bare perusal of the 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 nonspeaking order. We quash and set aside the impugned order dated 22.02.2022 and remit the matter to the respondent No.2 for denovo proceedings in accordance with law. In view of the fact that we have quashed the order of cancellation of GST registration, the GST registration stands revived.

Suspension and cancellation of GST Registration for vague reasons seems to be new harassment tool. This should be stopped as it affects taxpayers business quite strongly.

We also faced similar situation where we were called by GST officer to explain reasons of minor mismatch in ITC in GSTR-3B vs. GSTR-2A, which was clerical in nature and was already rectified by taxpayer in GSTR-9. But instead of accepting the reason, officer replied what if I cancel your registration by mistake, what would you do?

- TaxReply