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Case Title: Rishiraj Aluminium Private Limited Versus Goods and Service Tax Officer

Case No.: W.P.(C) 4125/2023

Date: 17.04.2023

CORAM: HON’BLE MR. JUSTICE VIBHU BAKHRU HON’BLE MR. JUSTICE TUSHAR RAO GADELA

Introduction

Since the show cause notice lacked any justification, the Delhi High Court invalidated it and reinstated the GST registration. Justices Vibhu Bakhru and Tushar Rao Gadela of the Supreme Court said the show cause notice was not enough. The petition does not provide enough information to understand why the petitioner’s GST registration was revoked or suspended. In order to properly reply to a show cause notice, the reasons for the proposed adverse action must be made explicit.

A show cause notice was issued to the petitioner, asking it to explain why company should not have its GST registration revoked. The petitioner has filed an appeal of this decision. Petitioner argued that “cease to be liable to pay tax” was the only reason given in the show cause notice for recommending termination of GST registration. The petitioner claimed that it has always been timely in filing its tax returns and making any necessary tax payments.

There is merit in the petitioner’s contention that in the present case the petitioner was at a loss as to how to respond to the impugned show cause notice as it did not disclose any intelligible reason for proposing cancellation of the petitioner’s registration.

Courts Analysis and Judgment

For some unknown reason, however, the GST registration of the petitioner has been put on hold, as stated in the show cause notice. The GST registration was reinstated when the court ruled to dismiss the show-cause notice.

It is clarified that this would not preclude the respondent from issuing a fresh show cause notice, clearly setting out the reasons for proposing to cancel the petitioner’s GST Registration, in the event the respondent desires to proceed with the said action. Needless to state, the petitioner would be given full opportunity to address the reasons before any adverse order is passed. The petition is allowed in the aforesaid terms. The pending application is also disposed of.

Judgment- click here to review the judgment

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Written by- Anushka Satwani