Afzal Husain Saiyed Vs Principal Commissioner of Central Tax (Bombay High Court)
Summary: The Bombay High Court considered a petition challenging the cancellation of GST registration and attachment of bank accounts under the Central Goods and Services Tax Act, 2017. The petitioner, engaged in metal scrap trading, was issued summons on allegations of availing Input Tax Credit through fake invoices and was subsequently arrested and placed in judicial custody. Thereafter, a show cause notice for cancellation of registration was issued, and bank accounts were attached. The petitioner contended that the show cause notice and cancellation order did not contain any reasons and were therefore legally defective. It was also argued that the petitioner could not respond to the notice because he was in judicial custody. Regarding bank account attachment, the petitioner submitted that no prior intimation had been given and that the attachment did not satisfy the requirements of Section 83 of the CGST Act. The respondents opposed the petition by referring to alleged ITC transfers and statements recorded during investigation. The High Court held that the show cause notice and cancellation order were arbitrary and illegal because they contained no reasons and violated principles of natural justice. Accordingly, the Court quashed the notice and cancellation order and restored the registration. However, the Court declined to interfere with the bank account attachment, directing the petitioner to avail the remedy under Rule 159(5) of the CGST Rules. The Court permitted the petitioner to file objections within one week, to be decided in accordance with law without limitation objections.
