AI Adil Traders Vs Deputy State Tax Officer (Telangana High Court)
The Telangana High Court allowed the writ petition challenging a show cause notice dated 1 November 2024 suspending the petitioner’s GST registration and the consequential order dated 16 January 2025 cancelling the registration. The Court held that the show cause notice was legally unsustainable because it failed to disclose the factual basis for the alleged violations and therefore violated the principles of natural justice.
The impugned show cause notice alleged violations of Rule 21(e), Rule 21(b), Rule 21(a) and Section 29(e) of the GST Act. These included allegations that the petitioner had wrongly availed input tax credit, issued invoices without supply of goods or services, failed to conduct business from the declared place of business, and obtained registration through fraud, wilful misstatement or suppression of facts. The petitioner contended that the notice merely reproduced the statutory provisions without stating any factual details or reasons explaining how these provisions had allegedly been violated. The petitioner relied on an earlier judgment of the High Court in W.P. No. 20080 of 2024, where similar notices had been set aside for the same reason.
The respondents opposed the petition, submitting that the petitioner had filed a reply to the show cause notice and that the final cancellation order had been passed in accordance with law.
