Case Law Details
Shree Balaji Industries Vs Commissioner of DGST And Anr (Delhi High Court)
Introduction: In a significant judgment, the Delhi High Court addressed the issue of GST registration cancellation for Shree Balaji Industries, highlighting the criticality of providing cogent reasons in administrative notices. The court’s decision to set aside both the show cause notice and the order of cancellation due to their lack of substantive reasoning underlines the importance of due process in tax administration.
Detailed Analysis: The case revolved around a show cause notice issued to Shree Balaji Industries, proposing the cancellation of its GST registration based on alleged wrongful Input Tax Credit (ITC) availed from M/s Jagdamba Enterprises. The court found several procedural and substantive flaws in the manner in which the tax authorities handled the cancellation process:
1. Lack of Specific Reasons: The show cause notice and the subsequent order of cancellation failed to provide specific reasons for the proposed action, merely citing a letter received from JC(AE) Noida about wrong ITC availment.
2. Procedural Anomalies: The order of cancellation was found contradictory, mentioning both the absence and presence of a reply from the petitioner to the show cause notice. Furthermore, the notice itself did not specify a date and time for a personal hearing, rendering it procedurally deficient.
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