HC Set Aside Cancellation Order Due to Failure to Provide Clear Reasons for Cancellation

Case Details: Bharti Enterprises v. Superintendent, Range 25 GST Division - [2023] 155 taxmann.com 147 (Delhi)

Judiciary and Counsel Details

• Vibhu Bakhru & Tushar Rao Gedela, JJ.
• Pulkit Verma & Peyush Pruthi, Advs. for the Petitioner. 
• Ms Anushree Narain & Ms Nishtha Mittal, Advs. for the Respondent.

Facts of the Case

The petitioner was served with Show Cause Notice (‘SCN’) for cancelling GST registration due to ‘Non-compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed’. Additionally, the SCN indicated that the petitioner’s GST registration was also suspended with effect from the date of the SCN. Subsequently, the order of cancellation was passed for the sole reason that the petitioner had not responded to the SCN.

The petitioner filed the present writ petition where it is held that the said SCN is vague and does not clearly set out the reasons for proposing to cancel the petitioner’s GST registration. It was incapable of eliciting any meaningful response as it does not provide any reason as to why the GST registration was proposed to be cancelled.

High Court Held

Further, the SCN also did not indicate that the petitioner’s registration was proposed to be cancelled with retrospective effect. However, the impugned order has cancelled the petitioner’s registration ab-initio. The impugned order is also silent as to why the proper officer has considered it fit to cancel the GST registration with retrospective effect.

Therefore, the cancellation order is set aside considering the lack of any specific particulars and the impugned order is not informed by reason.