Kerala HC Overturns GSTIN Cancellation Order Due to the Lack of a Fair Chance to be Heard

A recent decision to cancellation of the GST registration is been revoked by the Kerala High Court in a recent decision on the absence of a reasonable chance of getting heard.

The applicant, M/s Ajit Associates Architectural Consultants Pvt. Ltd is a Private Limited Company that is involved in furnishing services related to architecture. Under the GST act, it is the taxpayer. They would have filed their returns and filed the tax consecutively till August 2017. Hence a default return filing is there which the applicant has not done intentionally.

It was claimed that despite the fact that the company had received the show cause notice from the Assistant Commissioner of the GST Department, the concerned accountant who was in charge of filing returns failed to inform management of the situation and failed to submit a sufficient response to the show cause.

According to the information provided, the petitioner has now submitted returns for the periods from August 2017 onward that were in default, and those returns have been regularised until February 2021.

The claim is that the petitioner has not received notice from or been heard by the subsequent official, who is the relevant officer. It is also argued that in order to exercise the discretion to cancel or not cancel the GST registration, the officer in question must be satisfied, and as a result, the person passing the order must necessarily speak with the petitioner in order to do so.

In Anantha Naganna Chetty v. the commissioner of Income Tax Andhra Pradesh, Hyderabad witnessed that until the taxpayer is placed on notice for the officer change, he does not opt for any chance to demand a re-hearing or re-opening. It was determined as a result that it is necessary under such conditions for the succeeding Officer to tell the assessee of the plan to continue the proceedings.

The officer who issued the Ext.P2 order has not been heard in the current case, according to a single judge bench of Justice TR Ravi. Additionally, the petitioner wasn’t informed that such an order was being considered.

The argument put out by the respondents is that the petitioner was given notice and had sufficient time to respond, but he decided not to do so. Therefore, it is argued that the petitioner Company cannot be heard for claiming that there has been a procedural breach because they did not take advantage of the chance for a hearing.

Thus, the use of the term “proper Officer” in the proviso to Section 29(2) of the GST Act better emphasizes the obligation that the succeeding Officer notify the assessee. The required conclusion is that before terminating the registration, the competent official must speak with the interested party, which, according to the Bench, would entail that the following officer must also notify the assessee.

Case Title	M/s.Ajit Associates Architectural Consultants Pvt. Ltd
Citation	WP(C) NO. 41275 OF 2022
Date	01.08.2023
Respondent	Assistant Commissioner, Joint Commissioner (Appeals), State of Kerala Represented by Secretary to Government, Union of India Represented by Secretary to Government, Ministry of Finance
Kerala High Court	Read Order