Order Date – 12 June 2023

Parties: M/S ULTRA STEEL, M/S BUNDELKHAND TRADERS Vs THE STATE OF MADHYA PRADESH, STATE TAX COMMISSIONER, APPELLATE AUTHORITY & JOINT COMMISSIONER, ASSISTANT COMMISSIONER, STATE TAX, 

Facts – 

• The Petitioners, M/s Ultra Steel and M/s Bundelkhand Traders. filed the present appeal against the cancellation of registration under the State Goods and Services Tax Act (SGST) and the consequential orders of dismissal of an application for revocation of cancellation of registration and the dismissal of appeal u/S.107 of the SGST.

Issue – 

• Whether the cancellation of registration is in order?

Order – 

• The Divisional Bench of Hon’ble High Court observed that it is obvious at first glance that the show cause notice did not contain sufficient reasons to enable the assessee-petitioner to file a reply and, therefore, reasonable opportunity of being heard was denied to the petitioner.
• By saying that the registration has been obtained by fraud/wilful misstatement/suppression of facts, is not sufficient. Such terms need to be supported by reasons as to why, how and under what circumstances the registration was obtained by fraud/wilful misstatement/ suppression of facts. More so, such reasons ought to be supported by at least some fundamental supporting material, which, in the instant case is conspicuously missing.
• The application dated 11.02.2022 was, in fact, a reply to the show cause notice for cancellation of registration and, therefore, it appears that the Revenue has not even cared to ensure that true facts are reflected from the show cause notice. The carelessness on the part of the Revenue is palpable.
• Thus, it was held that Court has no manner of doubt that the impugned show cause notice and the consequential order of cancellation of registration dated, rejection of application for revocation of cancellation of registration and the appellate order are vitiated in law for being vague and having been issued in violation of principles of natural justice (audi alteram partem).
• The Revenue is at liberty to proceed by issuing a fresh, proper and lawful show cause notice to the petitioner-assessee. The writ petitions are quashed.

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