Rashid Proprietor of MS Enterprises Vs Union of India and Ors. (Delhi High Court)
The Delhi High Court, in the case of Rashid Proprietor of MS Enterprises vs. Union of India and Ors., ruled that GST registration cannot be cancelled without providing specific allegations and a proper reasoning process. The petitioner challenged the cancellation of his GST registration through a writ petition under Article 226 of the Constitution, arguing that the show cause notice (SCN) issued lacked sufficient details and failed to comply with principles of natural justice. The court found merit in these claims, emphasizing that procedural fairness must be upheld.
Initially, an SCN was issued on August 18, 2023, citing “suspicious purchases” as the reason for cancellation. The petitioner responded, and the proceedings were subsequently dropped on August 22, 2023. However, a second SCN was issued on November 24, 2023, alleging that the petitioner’s business was not operational at its declared location and was involved in fraudulent input tax credit (ITC) claims. The petitioner contended that these allegations were unsubstantiated, particularly since a physical verification report dated August 22, 2023, confirmed the business was functional.
The High Court noted that the petitioner was not provided with the letter from CGST Delhi East, which formed the basis of the ITC fraud allegations. Additionally, no opportunity for a personal hearing was granted.
