Bombay HC Quashes GST SCN Issued to Old Address, Cites Violation of Natural Justice

If a notice regarding Goods and Services Tax (GST) is sent to an outdated address after a person’s registration has been cancelled, such notice is deemed invalid, the Bombay High Court has recently ruled.

The court further stated that making decisions based on a notice not properly served violates fair legal practices.

Dipak Metal Industries, under the leadership of its proprietor, Rahul Raj, has filed a writ petition contesting a revisional order dated July 22, 2024. This order, issued under Section 108 of the CGST/MGST Act, 2017, retrospectively cancels the company’s GST registration, which was originally granted on August 12, 2017.

The counsel of the applicant stated that the revisional order was passed without serving any SCN or granting a chance of hearing. As per the counsel, the SCN on 1 July 2024 was sent to an outdated address despite the department already holding the correct Ahmedabad address, as specified in the earlier voluntary cancellation order dated 22 June 2022, which came into force from 31 May 2022.

Read Also: Bombay HC Quashes Order Due to Improper Service of GST Notice U/S 37C(1)

The department’s legal representative contended that the petitioner had submitted inaccurate addresses, which was seen as an attempt to mislead the authorities.

The representative highlighted that communication, including emails, had been sent to the registered address, and that the department had taken appropriate measures to serve notice. Additionally, the counsel pointed out that the petitioner could not now assert a lack of notice after providing misleading or ambiguous information.

The Division Bench, including Justice M.S. Sonak and Justice Advait M. Sethna, said that the service validity was the issue in question, not the allegation of fraud. As per the court, the department earlier had used the Ahmedabad address while communicating the earlier cancellation order in June 2022, yet the revisional SCN was sent to the old address that had become unrelated after cancellation.

No effective show cause notice (SCN) service on 1 July 2024 was there, and the revisional order passed dated 22 July 2024 was not sustainable.

The revisional order has been set aside by the court for the violation of natural justice and permitted the department to re-serve the show-cause notice at the proper address or via the counsel of the applicant.

The applicant needs to submit a response within four weeks of obtaining the notice, as directed, and the revisional authority was sought to authorise a hearing and pass a reasoned order as per the statute.

The previous cancellation order on 22 June 2022 stands revived; the court asked and said that it needs to be specified on the GST portal. Without any order, the writ petition was permitted.