Cancellation of GST Registration is not Sustainable if SCN and Order are Vague: HC

Case Details: Gigamade Machineries (P.) Ltd. v. State of Gujarat - [2023] 148 taxmann.com 309 (Gujarat)

Judiciary and Counsel Details

• • Ms Sonia Gokani & Sandeep N. Bhatt, JJ.
  • Maulik Nanavati, Adv. for the Appellant.
  • Trupesh Kathiriya for the Respondent.

Facts of the Case

The department issued a show cause notice (SCN) for cancellation of registration to the petitioner and stated that “Taxpayer found non-functioning / not existing at the principal place of business”. In reply to the said show-cause notice, the petitioner specifically stated that the notice didn’t give any reasons for initiating process of cancellation of GST registration of the petitioner.

However, the registration was cancelled and the order of cancellation did not record any reasons for cancellation of GST registration. It filed writ petition against the order.

High Court Held

The Honorable High Court noted that the Authority should have at least referred to contents of notice and response by petitioner. In the instant case, the reasons for initiating process of cancellation were not mentioned in SCN. Moreover, the SCN was vague, bereft of any material particulars and impugned order was also vague and not a speaking order.

Therefore, the principles of natural justice were violated as registration had been cancelled without adducing proper reason. Thus, it was held that the impugned SCN and order were to be set aside and the Authority was at liberty to issue fresh notice for cancellation of registration.