No Clear Reason in SCN for Cancelling GST Number of Firm, Gujarat HC Reverses Order

The order that cancels the GST registration of Sona Metals is been refused by the Gujarat High Court quoting that there is lesser information for the cancellation.

Under the Gujarat Goods & Service Tax Act the applicant has questioned the cancellation order on the basis that the show cause notice furnished by the respondent was uncleared and does not furnish enough details.

A show cause notice in form GST REG-17/31 was been provided by the respondent that was uploaded on the portal of the department. The notice under Section 29 of the GST Act read with Rule 22(1) of the GST Rules, 2017, does not be obtained physically through the applicant at their registered place of business.

The cancellation of the GST registration would be there when the same would be received via bogus means or the planned misstatement or prohibition of the facts as specified unclearly in the notice.

An order cancelling the applicant’s registration via Form GST REG-19 has been issued by the Assistant Commissioner, Ghatak which was uploaded on the department portal.

But the cancellation was on the grounds of the show cause notice which the applicant claimed that he does not have obtained any such notice as stated in the order. Hence the applicant furnished a petition questioning cancellation.

There are fewer and unclear details in the show cause notice, Advocate MG Nanavati, representing the applicant contented, which makes it impossible for the applicant to furnish the relevant answer.

He indeed questioned that the cancellation order which was issued through the Assistant Commissioner, failed to furnish any causes for the cancellation beyond quoting the related provision of the law.

Referring to an identical case, Aggrawal Dyeing and Printing Works Vs. State of Gujarat & Ors. (Special Civil Application No.18860/2021), Nanavati represented that the court would have denied and set aside the GST show cause notice furnished via the relevant respondent authority.

Respondent representative AGP Pranav Trivedi questioned that the notice was provided to the applicant that comprises the crucial information for enabling him to answer.

Trivedi acknowledged that the notice would not have been sent via the Registered Post with Acknowledgment Due (RPAD), on validating the original file. Rather than the same was personally affixed to the closed premises of the registered office of the applicant.

Read Also: HC Refuses Assessment Order Due to Not Attached of Show-Cause Notice

The applicant can question the same via filing the petition under Section 107 of the GST Act, giving a chance to show all the disputes to the appellate authority once an order was passed through the respondent authority under Section 29 of the GST Act, Trivedi debated. Thus before the court, Trivedi requests not to entertain the current petition.

Since the show cause notice provided through the respondent to the applicant was very vague and cryptic” and makes it hard to answer appropriately for the applicant, the division bench of Justices Vipul M Pancholi and DM Desai stated while doing the considerations.

For the claim of the former notice of the respondent, the bench sees that the information was needed to get furnished to the applicant and the same was undisputed that the applicant did not obtain the show cause notice.

The division bench mentioned that “We are of the view that in both the aforesaid orders, the concerned respondent has failed to provide specific reasons for cancellation of registration under Section 29(2) of the GST Act.”

Both the show cause notice and the cancellation order would have been set aside and been cancelled by the bench and the permission of petition is given.

The freedom is been provided by the bench to furnish a new notice which consists of the information reasons complied through the reasonable chance of hearing to the applicant.

The council rendered to restore the registration of the applicant instantly. Towards the notice through filing the objections or answers the applicant can reply, including the required documents if laid upon, the bench stated.