Order cancelling GST registration quashed by HC for being passed without issuing Show Cause Notice

The Hon'ble High Court of Gujarat in Syed Jafar Abbas v. Commercial Tax Officer [R/Special Civil Application No. 14423 of 2020 decided on January 27, 2021] has quashed the order of cancellation of GST registration as it was passed without issuing show cause noticein Form GST REG-17 and was bereft of any details & no opportunity of hearing was provided to the assessee.

Facts

Syed Jafar Abbas ('Petitioner') has raised a writ application against the order dated June 4, 2020 ('Impugned order') cancelling the GST registration of the Petitioner with effect from October 24, 2018.

Issue

Whether the Impugned order is valid?

Held

The Hon'ble High Court in R/Special Civil Application No. 14423 of 2020 decided on January 27, 2021 has held as under:

• Observed that, the Impugned order of cancelling the registration was not only bereft of any details but was also passed without issuing the show cause notice in Form GST REG-17. Further noted that no opportunity of hearing was provided to the Petitioner.
• Quashed and set aside the Impugned order.
• Directed that, if the Commercial Tax Officer ('Respondent') intends to cancel the registration of the Petitioner by issuing a fresh order then, he shall first issue show cause notice in Form GST REG-17 giving an opportunity of being heard to the Petitioner and thereafter, pass an appropriate order.
• Further directed that, the above exercise must be completed within a period of four weeks from the date of presentation of this order before the authority.
• Clarified that, if the Respondent is of the firm view that the registration deserves to be cancelled, only then fresh show cause notice should be issued and fresh order of cancellation of registration should be passed, otherwise, the original registration must be restore in accordance with law.

Relevant provision

Rule 22(1) of the Central Goods and Services Tax Rules, 2017

'22. Cancellation of registration.-

(1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.'