Pankaj Mittal vs. Union of India

Canceling its GST registration was not decided favorably. Consequently, the petitioner has approached this Court by filing the present writ petition, seeking judicial intervention to set aside the impugned Show Cause Notice dated 02.05.2023 and the subsequent Order of Cancellation of Registration dated 08.08.2023. The petitioner contends that the Show Cause Notice was vague and did not specify any particular violations or reasons for the proposed cancellation, thereby depriving the petitioner of a fair opportunity to respond and defend against the allegations. The petitioner further argues that the cancellation of GST registration, which took retrospective effect from 28.01.2019, is legally unsustainable and has caused undue hardship and disruption to the business operations of M/s Om Sai Enterprises. The petitioner asserts that the principles of natural justice have been violated, as the impugned SCN did not provide sufficient details or grounds for cancellation, making it impossible for the petitioner to mount an adequate defense. Additionally, the petitioner highlights that the suspension of GST registration from the date of the SCN (02.05.2023) and the eventual cancellation order were arbitrary and lacked proper justification. The petitioner also mentions that despite filing an application for recall of the cancellation order and seeking condonation of delay, the authorities did not provide a fair hearing or consider the merits of the petitioner’s case, thus perpetuating the injustice. The petitioner seeks the restoration of the GST registration to enable the continuation of business activities without further hindrance. The petitioner emphasizes the significant adverse impact of the cancellation on business operations, including financial losses, reputational damage, and disruption of ongoing transactions. The petitioner submits that the restoration of GST registration is crucial for complying with statutory obligations and maintaining seamless business operations. The petitioner prays for the issuance of a writ of certiorari or any other appropriate writ, order, or direction to quash the impugned SCN and the subsequent cancellation order, and to direct the respondents to restore the GST registration of M/s Om Sai Enterprises. The petitioner also seeks any other relief deemed fit and proper by this Hon’ble Court in the interest of justice, underscoring the need for a fair and transparent process in the issuance of Show Cause Notices and cancellation orders under the CGST Act. The petitioner argues that adherence to the principles of natural justice and fair play is essential in ensuring that administrative actions do not unjustly harm businesses and that any alleged non-compliance is adequately addressed through clear, specific, and substantiated notices, providing the affected parties with a fair opportunity to respond and rectify any issues. The petitioner stresses that the arbitrary and retrospective cancellation of GST registration without proper cause and due process undermines the legal and regulatory framework and adversely affects the rights and legitimate interests of taxpayers.

The petitioner’s application for recalling the cancellation of its GST registration was not decided. Despite sending a reminder, the petitioner has not received any response. The sole reason stated in the impugned Show Cause Notice (SCN) for proposing the cancellation of the petitioner’s GST registration is as follows: “1. In case, Registration has been obtained by means of fraud, wilful misstatement, or suppression of facts.” It is evident that the SCN fails to meet the requisite standards of a show cause notice as it does not clearly specify why the petitioner’s GST registration was proposed to be canceled. While it is alleged that the registration was obtained by fraud, willful misstatement, or suppression of facts, the SCN fails to disclose the precise nature of the fraud, does not specify which statement is alleged to be a willful misstatement, and does not reveal the facts that are allegedly suppressed. The purpose of a show cause notice is to afford the noticee an opportunity to respond to the allegations. Clearly, a notice that does not specify the nature of the allegations is incapable of eliciting a meaningful response. The order dated 08.08.2023 canceling the petitioner’s GST registration is also devoid of any reason. The contents of the order are similarly vague and lack the necessary details to justify the cancellation.