Case Law Details
Fayiz Nangaparambil Vs Union of India & Anr. (Delhi High Court)
SCN lacking specific reasons is liable to be set aside
The Hon’ble Delhi High Court in Fayiz Nangaparambil v. Union of India & Anr. [W.P.(C) 7477/2023 dated May 26, 2023] set aside the Show Cause Notice (“SCN”) proposing to cancel the GST Registration of the assessee, on the grounds that SCN is bereft of any specific reasons that could be addressed by the assessee. Held that, the SCN was short of the necessary requirements as it did not contain any specific allegation.
Facts:
This Petition has been filed against a SCN, dated May 20, 2023 (“the Impugned SCN”) issued to Fayiz Nangaparambil (“the Petitioner”) by the Revenue Department (“the Respondent”) wherein the Petitioner was called upon to show cause as to why it’s GST registration should not be cancelled and also records that the Petitioner’s GST registration is suspended with effect from May 20, 2023.
The Petitioner contended that the only reason stated in the Impugned SCN for proposing cancellation of the Petitioner’s GST registration was “cease to be liable to pay tax” and mentioned that he has been filing its tax returns regularly and also paying the taxes as due. However, the Petitioner’s GST registration has been suspended, in terms
of the Impugned SCN on account of the cryptic reason.
Issue:
Whether GST registration of the Petitioner is liable to be cancelled solely on the basis of the Impugned SCN which does not have any specific reason?
Held:
The Hon’ble Delhi High Court in W.P.(C) 7477/2023 held as under:
- Observed that, it is well-settled that the SCN is required to set out the relevant material in order to enable the noticee to meaningfully respond to the same.
- Noted that, the Impugned SCN is bereft of any specific reasons that could be addressed by the Petitioner.
- Held that, the Impugned SCN was short of necessary requirements as it did not contain any specific allegation that could be addressed with a meaningful response from the Petitioner.
- Clarified that, the Respondent is not precluded from issuing an appropriate Show cause notice, setting out the reasons for proposing any adverse action against the Petitioner.
- Set aside the Impugned SCN.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
CM APPL. 29045/2023 (for exemption)
1. Exemptions allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(C) 7477/2023 & CM APPL. 29044/2023 (for interim relief)
3. Issue notice.
4. Learned Counsel appearing for the respondents accept
5. The petitioner has filed the present petition, inter alia, impugning a Show Cause Notice dated 20.05.2023, whereby the petitioner was called upon to show cause as to why his GST registration not be cancelled. The Show Cause Notice also records that the petitioner’s GST registration is suspended with effect from 20.05.2023.
6. The only reason indicated in the Show Cause Notice for proposing the said action reads as under:
“1 Section 29(2)(e)-registration obtained by means of fraud, wilful misstatement or suppression of facts”
7. As apparent from the above, the Show Cause Notice is bereft of any specific reasons that could be addressed by the
8. It is well-settled that the Show Cause Notice is required to set out the relevant material in order to enable the noticee to meaningfully respond to the same.
9. In the present case, the Show Cause Notice was short of necessary requirements of the Show Cause Notice as it did not contain any specific allegation that could be addressed with a meaningful response from the petitioner.
10. Therefore, the impugned Show Cause Notice is set aside.
11. It is clarified that the respondents are not precluded from issuing an appropriate Show Cause Notice, setting out the reasons for proposing any adverse action against the petitioner.
12. Consequently, the order suspending the petitioner’s GST registration also stands quashed.
13. All pending applications also stand disposed of.
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