Delhi HC Withdraws SCN As Lacking Reasons and Reinstates GSTIN Number

The Delhi High Court presided over by justices Vibhu Bakhru and Tushar Rao Gadela, quashed the show cause notice, as it lacked proper reasons. Consequently, the GST registration, which had been suspended, was subsequently restored.

The bench highlighted the glaring inadequacy of the grounds presented in the show cause notice that led to the suspension and cancellation of the petitioner’s GST registration. It is a well-established principle that a show cause notice must unequivocally state the reasons behind any proposed adverse action in order for the recipient to effectively respond.

In this case, the petitioner was asked why their GST registration should not be revoked, subsequent to receiving the show cause notice that had resulted in the suspension of their registration.

The petitioner contended that the show cause notice merely cited “cease to be liable to pay tax” as the sole justification for the move to cancel their GST registration.

The petitioner further asserted that they had diligently fulfilled their obligations by timely filing tax returns and making all required tax payments. Nonetheless, due to the vague and ambiguous explanation provided in the show cause notice, their GST registration had been unjustly suspended.

Read also: GST Identification Number (GSTIN) and Its Applicability

Upon careful deliberation, the court ruled in favour of the petitioner, declaring the show cause notice null and void. As a result, the court mandated the immediate restoration of the petitioner’s GST registration, rectifying the unjust suspension.