In Special Civil Application No. 8990 of 2023 -GUJ HC- Gujarat High Court quashes Show Cause Notice and Order cancelling GST registration of Om Trading
Justice Vipul M. Pancholi & Justice Devan M. Desai [21-06-2023]

Read Order: Om Trading V. State of Gujarat

Chahat Varma

New Delhi, June 30, 2023: In a recent case, the Gujarat High Court has ruled in favour of Om Trading (petitioner), quashing both the show cause notice and the order that cancelled their GST registration. The High court found that the show cause notice lacked necessary documents and was cryptic in nature. Additionally, the order for cancellation of registration did not provide any reasoning, rendering it a non-speaking order.

Brief issue involved in the present case was that the petitioners, engaged in trading base oil and registered under the Goods and Services Tax Act, 2017, faced cancellation of their registration certificate. Respondent no.2, the authority, uploaded a show cause notice dated 24.11.2021 on the GST portal proposing to cancel their registration certificate, alleging fraud or wilful misstatement and subsequently cancelled their registration on 13.12.2021. Petitioners claimed they were unaware of the notice as they did not log into the GST portal and did not receive any supporting documents.

On the other hand, the Assistant Government Pleader representing the respondents, admitted that no speaking order was passed at the time of cancelling the petitioner's registration. He further stated that if the court were to quash the existing order and allow the authority to initiate fresh proceedings in compliance with the law, there would be no objections.

The division bench of Justice Vipul M. Pancholi and Justice Devan M. Desai noted that in a recent case in Sona Metals v. State of Gujarat [LQ/GujHC/2023/1831], the Gujarat High court has quashed and set aside a similar type of show cause notice issued to the concerned petitioner for cancellation of registration.

Based on the facts and circumstances of the present case, the bench concluded that both the show cause notice dated 24.11.2021 and the subsequent order dated 13.12.2021 should be quashed and set aside.

“However, liberty is granted to the respondent authorities to issue fresh notice with particulars of reasons incorporated with details and thereafter to provide reasonable opportunity of hearing to the petitioners and to pass an appropriate order in accordance with law,” added the bench.