Order Date: 15 February 2023

Parties: M/S DEVI PRODUCTS vs. STATE OF GUJARAT

Facts – 

• The Petitioner, M/S DEVI PRODUCTS had filed his return of income under the GST Act till June 2020. He had no business subsequent to June 2020, and therefore he was of the bonafide belief that there was no requirement to file the return.
• A show cause notice was issued on 15 March 2021 and informed that his registration was liable to be cancelled with immediate effect because he had not filed the return for six months.
• The financial hardship he suffered from July 2020 led him to believe there was no requirement for GST return to file. His registration has been cancelled without recording any particulars, reasons, or grounds for cancellation.

Issue – 

• Whether the registration cancelled is valid and acceptable?

Orders – 

• The Court considered the case of MRF Mazdoor Sangh vs. The Commissioner of Labour & Others, which held as the SCN should reflect the jurisdictional facts based on which the final order is proposed to be passed. Further, the Court relied on the case of Krani Associates vs. Masood Ahmed reported in (2010) 9 SCC 496 where the Court has held that insistence on recording of reasons is meant to serve the vital principles of justice that justice must not only be done but it must also appear to be done as well.
• The Court noticed that while cancelling the registration, the authority concerned has not even determined the amount payable pursuant to such cancellation which is hardly sustainable.
• The Court stated that the writ application is allowed to quash the show cause notice and the consequential order cancelling registration with liberty to the respondent to issue a fresh notice with particular reasons incorporating the details.