Order Date – 22 September 2023

Parties: Sh. Sachin Upadhyay, Proprietor of Bhagwati Trader Vs The Additional Commissioner Central Goods and Service Tax, Appeals-I, Delhi

Facts –

• The Petitioner, Sh. Sachin Upadhyay, Proprietor of Bhagwati Trader on 14.03.2020 opened a bank account with AU Small Finance Bank Ltd. and uploaded the details of the same on the GST portal.
• A show cause notice was issed on 05.12.2021 proposing to cancel the petitioner’s GST registration alleging non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed.
• The Proper Officer proceeded to cancel the petitioner’s GST registration with retrospective effect from 06.02.2020 by an order dated 03.01.2022 on the ground that the petitioner had not uploaded the bank details as evident from the response form.
• Aggrieved by the same, the petitioner filed an application for revocation of the cancellation order. The same was also rejected.

Issue –

• Whether the rejection of revocation of the cancellation order is valid?

Order –

• The Divisional Bench of Hon’ble High Court observed that the show cause notice did not provide any clue as to the reason for proposing cancellation of the petitioner’s GST registration. Since the said show cause notice is incapable of eliciting any meaningful response, it does not meet the standards required for a show cause notice. Any order passed pursuant to such a show cause notice would fall foul of the principles of natural justice.
• Further, the reasons for proposing to reject the petitioner’s application for revocation of the cancellation order are vague and unintelligible. The impugned order dated 23.05.2023 is equally cryptic and vague. It is evident from the reasons for rejection of the petitioner’s appeal as stated in the impugned order dated 23.05.2023, that the said order has been passed without application of mind.
• Hence it was held that the impugned show notice dated 5.12.2021 fails to disclose the reason for proposing cancellation of the petitioner’s GST registration and therefore, the impugned order cancelling the petitioner’s registration falls foul of the principles of natural justice. The impugned orders and the orders cancelling the petitioner’s registration are set aside.