Calcutta High Court Orders Reassessment of GST Registration cancellation

Limton Metals Limited And Anr. Vs Superintendent (Calcutta High Court)

the case of Limton Metals Limited and Anr. v. Superintendent, the Calcutta High Court reviewed an intra-court appeal filed by the petitioners against the cancellation of their GST registration. The appellants contested the cancellation, arguing that it violated the principles of natural justice and lacked sufficient reasoning. The cancellation, which took place on January 31, 2024, was retrospective, dating back to December 18, 2021. The appellants were issued a show-cause notice on January 19, 2024, which included allegations from the Assistant Commissioner of the Anti-Evasion unit. Despite submitting a reply on January 31, the authorities issued the cancellation without providing reasons for the retrospective action, which prompted the appeal.

The Court found that the order issued on February 1, 2024, was in the statutory Form GST REG-19 but failed to include any explanations for the cancellation, thus making it a non-speaking order. The Court emphasized that a proper speaking order, which includes reasons for the cancellation and an explanation for the retrospective effect, is necessary. As a result, the Court set aside the cancellation order and remanded the case back to the original authority for a fresh decision. The authority was instructed to give the appellants a personal hearing, consider their submissions, and take into account any additional documentation provided. The Court also allowed for the possibility of a surprise inspection if deemed necessary. The authority must schedule a hearing within two weeks of receiving the Court’s order, ensuring a fair and thorough reassessment of the situation.