The cancellation of a Goods and Services Tax (GST) registration without mentioning the mandatory date and time of the personal hearing in the show-cause notice (SCN) violates the statutory safeguard under the Karnataka Goods and Services Tax Act, 2017 (KGST Act), the High Court of Karnataka has held. Accordingly, the court set aside the cancellation order and remitted the case for reconsideration.
The cancellation of its GST registration issued by the Assistant Commissioner of Commercial Taxes has been contested by R. M. Services. The case commences when an SCN asking for cancellation was issued; however, it does not mention any date or time for a personal hearing.
The authority, even after this omission, moved to cancel the registration, and the decision was kept in the next proceedings. The appellant was dissatisfied with this and therefore approached the High Court under Article 226 of the Constitution of India, asking for the quashing of the cancellation order and restoration of the registration.
The appellant, represented by Pruthviraj P. Hittalamani, contended that the cancellation order was untenable because the Show Cause Notice (SCN) issued under Section 29 of the KGST Act, 2017, did not specify the date and time for a personal hearing. Moreover, the proviso to Section 29(2) of the KGST Act, 2017 mandates granting such a hearing before effecting cancellation. The failure to comply with this statutory requirement, therefore, vitiated the entire proceedings and denied the appellant a meaningful opportunity to be heard.
A Single Judge Bench of Justice M. Nagaprasanna stated that the problem had been addressed via a coordinate bench, which held that an SCN for cancellation of registration should mandatorily cite the date and time for personal hearing, in accordance with the proviso to Section 29(2) of the KGST Act, 2017. The court held that this compliance is not optional and consists of a statutory right of the taxpayer.
The court ruled that the cancellation is not sustainable as the notice was issued to the appellant, who failed to comply with this requirement, and the cancellation order did not establish that any purposeful opportunity of hearing.
The Karnataka High Court granted the petition, set aside the cancellation order, and sent the matter back to the authority for a fresh review starting from the stage of the show-cause notice.
| Case Title | R.M. Services vs. Commissioner of Commercial Taxes |
| Case No. | WP No. 107444 of 2024 |
| Counsel for Petitioner | Sri. Pruthviraj P. Hittalamani |
| Counsel for Respondents | Sri. T. Hanumareddy |
| Karnataka High Court | Read Order |
