Vague SCN may be non-maintainable but can be practically handled better

GST Cases sometimes remind us of Charlie Chaplin Shows. However, these shows may be better handled by taxpayers at the adjudicating level itself in case they communicate well with the department. All field officers may not be the same, but in the interest of lowering litigation time and cost for themselves, all taxpayers may try to represent appropriately at the adjudicating stage itself rather than fight a bitter batter at the Courts. Consider this case –

• Show Cause Notice reads as under: "Discrepancies noticed while conduct of Physical Verification".
• The petitioner's response is "the dealer is ready to provide information and full cooperation".
• The Proper Officer gave full consideration to the said response and cancelled the petitioner's GST registration for the following reasons: "1. THE REPLY SUBMITTED BY THE TAXPAYER IS NOT FOUND SATISFACTORY."
• As is obvious, The Show Cause Notice did not specify any specific reasons for cancelling petitioner's registration and thus is non-maintainable.
• The petitioner's GST registration was cancelled by an order, pursuant to a Show Cause Notice. No additional reason was provided.
• The Proper Officer had passed order rejecting the petitioner's application for revocation of cancellation of his GST registration. The reason provided was that the Proper Officer found that the petitioner's explanation for delay of one day was not acceptable because the petitioner had not quoted any Section of the Limitation Act, 1963 in support of its claim. The HSN of goods and services was not reflected on the CBIC portal. The Proper Officer also highlighted that the principal reason for rejection of his was that the petitioner had shifted its place of business to a new place but the same was not reflected as additional place of business in the requisite form; thus, GSTIN could not be restored as it pertained to an earlier address.
• The petitioner had stated that he had shifted after his registration was cancelled and therefore, was unable to file the requisite forms. This contention was not accepted. The petitioner's appeal had been rejected by Appellate Authority (Commissioner of Central Tax Appeals-II, Delhi). In addition to the grounds taken in the order, the appellate authority also noted that some discrepancies noticed in the tax liability in the returns of FY 2018- 19, 2019-20 and 2020-21.
• The Hon'ble High Court in this case of SHIV GANGA UDYOG Vs COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX [2023-VIL-612-DEL] directed that the petitioner's GST registration be restored forthwith. However, the respondents were not precluded from taking such steps, if they are of the view that the petitioner's registration is required to be cancelled or any other measures are required to be taken. The petitioner's right to contest any such proceedings was also reserved.

The above proceeding resulted in disruption of the taxpayer's business by 1 year and the show may not be over yet. On the contrary, the situation may have been avoided by a more professional reply to a vague SCN and better representation.