Manek Steel LLP Vs Union of India & Ors. (Bombay High Court)
Bombay High Court has quashed and set aside a GST registration cancellation order against Manek Steel LLP, citing a “gross breach of natural justice.” The court’s decision was based on the fact that the tax authorities failed to provide the taxpayer with the specific grounds for the cancellation or a crucial letter that formed the basis of the order.
The petitioner, Manek Steel LLP, challenged an Order-in-Original dated February 7, 2022, and a subsequent Order-in-Appeal dated March 28, 2024. The petitioner’s counsel argued that the initial show-cause notice was “extremely vague,” merely copying statutory language without citing any specific material to support allegations of fraud or misstatement. The counsel highlighted that the impugned order referenced a letter from the Deputy Commissioner dated January 13, 2022, which was not mentioned in the show-cause notice and a copy of which was never provided to the petitioner. As a result, the company was not given an opportunity to respond to the allegations against it.
In response, the counsel for the tax department, Mr. Ochani, conceded that the orders could be set aside. He requested an opportunity to issue a new show-cause notice with all relevant material to the petitioner within four weeks. The court agreed to this proposal but imposed a condition on the taxpayer. For a period of three months, Manek Steel LLP is prohibited from using its accumulated Input Tax Credit (ITC). The petitioner accepted this condition, which was recorded as an undertaking to the court.
