Order Date – 09 December 2022

Facts – 

• The Petitioner, Lakkad Brothers and Co. was served with a show-cause Notice dated 02.11.2021, in Form GST REG-17/31, proposing to cancel the registration, on the ground that “Registration has been obtained by means of fraud, wilful misstatement or suppression of facts.”
• Petitioner contended no sufficient information was provided barring the two lines. Further, no time or date was mentioned for personal hearing. 
• Even though the petitioner filed a reply on 07.10.2022, an order was passed cancelling the registration of the petitioner stating “VALIDITY OF THE TRANSACTIONS CARRIED OUT WAS NOT SUBSTANTIATED BY MEANS OF REPLY FILED”

Issue – 

• Whether the cancellation of registration is in order?

Order – 

• The Hon’ble High Court held that specific reasons are not stated as to why the registration of the petitioner is proposed to be cancelled. Supporting documents are also not attached to justify the reason. Moreover, in the show-cause dated 02.11.2021, though opportunity granted, no time or date was specified, which in our opinion reflects non-application of mind by the respondent authority.
• It was held that in the decision of Aggarwal Dyeing and Printing Works vs. State of Gujarat [2022] 137 Taxmann.com 332 (Gujarat), reasons are heart and soul of any order and non-communication of the same amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice, and resultantly violates principles of natural justice.
• Hence the show cause notice and order of cancellation of registration are set aside.