Shree Shyamji Traders Vs State of U.P. And 3 Others (Allahabad High Court)
In the case of Shree Shyamji Traders vs. State of U.P. and Others, the Allahabad High Court addressed the cancellation of GST registration, emphasizing the need for compliance with the procedural and substantive requirements outlined in Section 29(2) of the GST Act. The petitioner, engaged in the business of iron and steel scrap, faced cancellation of GST registration after a survey revealed no business activity at the registered address. The cancellation order lacked specific reasons, and the subsequent revocation application and appeals were rejected without providing an opportunity for a personal hearing or assigning proper reasons.
The court observed that Section 29(2) specifies five conditions under which GST registration may be canceled. In this case, none of these conditions were cited as grounds for cancellation. The authorities failed to mention any violations, provide evidence, or record findings in support of the cancellation. The court also noted procedural lapses, including issuing notices without specifying dates or locations for hearings, violating the principles of natural justice.
The High Court set aside the cancellation and appellate orders, allowing the respondent authority to issue a fresh notice based on valid grounds under Section 29(2). The court emphasized that any new proceedings must be conducted on their own merits without prejudice. Additionally, it imposed a cost of ₹10,000 on the proper officer responsible for the cancellation, to be paid to the petitioner within one month. This ruling highlights the importance of adhering to procedural requirements and ensuring that substantive grounds are clearly established before canceling GST registrations.
