GST Registration cancellation without opportunity of being heard is violative of principles of natural justice: All HC

Case Details: Apparent Marketing (P.) Ltd. v. State of U.P. - [2022] 141 taxmann.com 265 (Allahabad)

Judiciary and Counsel Details

• • Saumitra Dayal Singh, J.
  • Praveen Kumar for the Petitioner. 
  • C.S.C. for the Respondent.

Facts of the Case

The assessee was a trader whose business premises were surveyed by revenue and those premises were found closed. Thereafter, another survey was conducted at the assessee’s business premises and no adverse material discovered. Later on, the assessee received a notice whereby the registration granted to the assessee under GST Act was proposed to be cancelled and reason mentioned was “Your firm was found bogus in inspection as information received from headquarter.”

The assessee did not make compliance of the notice and number was cancelled. The application was revocation was filed by the assessee but it was rejected and the appeal was also dismissed. It filed writ petition against the same.

High Court Held

The Honorable High Court observed that GST Act does not contain any provision which provides that registration could be cancelled merely by describing assessee as bogus without any supporting material. It was not a case of department that assessee had not commenced business within six months of grant of registration or he had not furnished returns continuously for six months. The initial SCN issued to assessee was vague as it did not mention any of circumstances mentioned in section 29 or any other specific charge with supporting material. At appeal stage also, the appellate authority erred by ignoring that original proceedings did not contain any permissible reason for cancellation of registration and merely describing assessee as bogus would mean that orders were issued without granting any opportunity to assessee. Therefore, the impugned appellate order along with original orders were set aside.