In WP(C) No. 29807 of 2022-KER HC- Form GST REG-31 relates to proceedings for suspension of registration and can't be treated as Show Cause Notice under Rule 21 of CGST Rules, which requires issuance of notice in form GST REG-17: Kerala HC
Justice Gopinath P. [22-12-2022]

Read Order: DOMINIC DAVID v. THE STATE TAX OFFICER AND ORS 

Mansimran Kaur

Ernakulam, February 1, 2023: The Kerala High Court has recently quashed an order issued u/s 29 of the CGST / SGST Acts canceling the registration granted to the petitioner after noting that the notice was absolutely vague and the reasons for proposing cancellation even the period for which there was alleged failure to file returns was not specified. 

Justice Gopinath P. disposed of the instant petition by observing,  “It is clear that Form GST REG-31 is one relatable to proceedings for suspension of registration and cannot be treated as a show cause notice under Rule 21 of the CGST Rules, which requires the issuance of a notice in form GST REG-17.”

The petitioner approached this Court on being aggrieved by the cancellation of registration granted to the petitioner under the provisions of the CGST / SGST Acts. 

The brief facts necessary for the consideration of the issues raised in this writ petition indicated that the petitioner was issued with a show cause notice calling upon the petitioner to show cause as to why the registration granted to the petitioner shall not be canceled for failure to file returns for a continuous period of six months.

The petitioner did not respond to the show cause notice and order dated May 5, 2022 was issued under Section 29 of the CGST / SGST Acts canceling the registration granted to the petitioner. 

The petitioner did not file any application for revocation as provided for in Section 30 of the CGST / SGST Acts, however the petitioner approached the appellate authority by filing an appeal under Section 107 of the CGST / SGST Acts. 

The appeal of the petitioner was  rejected finding essentially that the appellate authority has no power to interfere with an order issued under Section 29 of the CGST / SGST Acts and since the petitioner had not filed any application for revocation within the time permitted under section 30 of the CGST / SGST Acts, the appellate authority has no option but to reject the appeal.

After pursuing the rival contentions of the parties, the Court was of the view that the writ petition was liable to be allowed as the notice was  absolutely vague and it was not clearly specified with any clarity, the reasons for proposing cancellation even the period for which there was alleged failure to file returns was not specified.

The contention taken by the Government Pleader that since the Court deals with fiscal legislations, the law must be strictly interpreted in favour of the revenue is not a principle that applies to the situation that this Court is concerned, the Court stated.  

Reference at this stage was placed on the judgments in Mumbai v. Dilip Kumar and Company and others & Kerala and another v. Mother Superior Adoration Convent.

Noting that the provisions of Sections 29/30 of CGST/SGST gives the power to cancel registration and also to revoke it, the Bench added that hese are not provisions which need to be interpreted with reference to the principles laid down in Dilip Kumar’s case (supra) and in Mother Superior Adoration Convent.

In view of such observations, the writ petition was allowed.