Neha Enterprise Vs State of Gujarat (Gujarat High Court)
The Hon’ble Gujarat High Court in Neha Enterprise v. State of Gujarat [R/Special Civil Application No. 20505 of 2022 dated January 19, 2023] has quashed and set aside the Show Cause Notice (“SCN”) and the consequential GST registration cancellation order passed by the Revenue Department solely on the ground of violation of the principles of natural justice as no reasonable opportunity of hearing was given to the assessee. Further, directed the Revenue Department to issue a fresh SCN and provide reasonable opportunity of hearing. Further that, the Goods and Service Tax (“GST”) Registration of the assessee to be restored.
Facts:
This petition has been filed by Neha Enterprises (“the Petitioner”) challenging the SCN dated May 10, 2022 in the Form GST REG-17/31 (“the Impugned SCN”) issued by the Revenue Department (“the Respondent”) under Section 29 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) read with Rule 22(1) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) on the grounds that it was not sent to the Petitioner physically and that no reasons for the allegation was mentioned in it.
The Impugned SCN uploaded on the GST Portal consisted of a single page and there was no other explanation for the Petitioner to respond to the charges. Further, the Petitioner was instructed to appear in person, failing which the matter was to be decided ex-parte. However, no time for personal hearing was granted and that the Impugned SCN did not specify the name and designation of the person issuing it. The Petitioner replied to the Impugned SCN stating that the Impugned SCN was unintelligible for any prudent person to reply.
The GST Registration of the Petitioner was cancelled by the Respondent vide order dated May 25, 2022 (“the Impugned Order”), but no reason for such cancellation was mentioned. The Petitioner preferred an application dated June 15, 2022 seeking revocation of cancellation of GST Registration but the same was rejected.
The Respondent contended that the GST Registration of the Petitioner was obtained by fraud on the basis of the spot verification conducted and therefore, the Impugned SCN had been issued and due to a technical glitch, the same could not be uploaded on the GST Portal.
Issue:
Whether the SCN not being sent to the Petitioner physically and not mentioning the reasons for which allegations were made is violative of principles of natural justice?
Held:
The Hon’ble Gujarat High Court in R/Special Civil Application No. 20505 Of 2022 held as under:
