SCN without specifying grounds of GST registration cancellation: Delhi HC directs reconsideration 

Sai Aluminium Exim Vs Pr Commissioner Of Goods And Service Tax  (Delhi High Court)

Introduction: The Delhi High Court recently addressed a crucial matter in the case of Sai Aluminium Exim vs PR Commissioner of Goods and Service Tax. The petitioner sought relief against the cancellation of its GST registration, emphasizing the lack of a specific reason and due process in the cancellation procedure.

Detailed Analysis: The petitioner’s GST registration, initiated on July 1, 2017, faced challenges when it applied for an amendment in 2022 to reflect a change in its principal place of business. Despite submitting the necessary documents, the application was rejected on May 9, 2023, citing the non-submission of required information.

Subsequently, on September 1, 2023, a Show Cause Notice (SCN) was issued, proposing the cancellation of GST registration under Section 29(2)(e), alleging registration obtained through fraud or wilful misstatement. The petitioner’s GST registration was suspended, but the SCN lacked specific details on the alleged wrongdoing.

The petitioner contended that the impugned order, dated September 14, 2023, which cancelled its GST registration with retrospective effect from July 1, 2017, lacked proper reasoning. The order merely referenced the SCN without specifying grounds for cancellation.

The petitioner argued that no prior notice of inspection was provided, and it had already shifted its principal place of business. The lack of specific reasons in the impugned order was challenged, and the petitioner filed an application for revocation of the cancellation, which is still pending.

The court, considering the merit in the petitioner’s contentions, set aside the order dated May 9, 2023, rejecting the application for amendment. The petitioner was granted the opportunity to submit all necessary documents and information to support its application for revocation of the cancellation of GST registration. The concerned officer would then assess whether the business was indeed operating at the claimed principal place.

Conclusion: In conclusion, the Delhi High Court’s decision underscores the importance of due process in GST registration matters. The judgment provides relief to the petitioner, emphasizing the need for specific reasons in cancellation orders and allowing the petitioner to reapply for registration revocation with proper documentation. This case sets a precedent for reconsideration in similar circumstances, promoting fairness and transparency in GST proceedings.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT