Pankaj Cottage vs The Goods and Service Tax Officer

The petitioner is in this court aggrieved by Ext.P1 order cancelling the registration granted to the petitioner under the Central Goods and Services Tax Act/ the State Goods and Services Tax Act [Hereinafter referred to as the ‘CGST/SGST Acts”], in the exercise of jurisdiction under Section 29 of those enactments.

2. The facts necessary for an adjudication of the issue raised may be briefly noticed. The petitioner suffered Exhibit P1 order cancelling the registration granted under the CGST/SGST Acts. Ext P.1 was issued on 04-04-2022. Though Ext.P.1 appears to have been preceded by a show cause notice issued electronically, the petitioner has a case that the show cause notice never came to his attention. On coming to know of the order cancelling the registration, the petitioner applied for revocation, which application was rejected by Ext.P3, finding that the application for revocation was beyond the time prescribed under Section 30 of the CGST/SGST Acts. The petitioner has therefore filed an appeal under Section 107 of the CGST/SGST Acts, and the same is pending consideration of the first appellate
authority.

3. Mr. N.N. Suganapalan, learned Senior Counsel appearing for the petitioner, on the instructions of Adv. S. Sujin, would contend that the entire procedure adopted by the respondents in cancelling the registration of the petitioner is absolutely illegal and unsustainable. He points out with reference to the show cause notice issued prior to cancellation of the registration that the said show cause notice itself is not in the manner prescribed by the Rules. 

It is submitted that the show cause notice should have been issued in Form GST REG-17. It is  submitted that the show cause notice is issued in Form GST REG-31, which is the form applicable to proceedings leading to the suspension of the registration for reasons specified. It is further pointed out with reference to the particulars required in the show cause notice [Form GST REG-17] that none of those particulars are specified in Ext.P5 show cause notice issued to the petitioner. It is submitted that though Ext.P6 specifies that it is issued in form GST REG-31, even that form has not been used in its entirety. It is submitted that the officer issued a notice in a form containing vague details of the reasons for cancellation, and this is not permissible in law. 

The Learned Senior Counsel appearing of the petitioner refers to the judgment of a Division Bench of the Gujarat High Court in Aggarwal Dyeing and Printing v. State of Gujarat (Judgment dated 24.2.2022 in Special Civil Application No. 18860/2021 and connected cases) as also the judgment of the same
Court in Sing Traders v. State of Gujarat (Judgment dated 6.4.2022 in Special Civil Applicatio n No. 6315/2022) to contend that where the show cause notice is vague and where the order of cancellation also does not specify the factors which lead to the cancellation of registration, the entire proceedings must be held bad in law. He submits that the delay in filing returns and payment of tax for the period of default was not wilful and was on account of severe financial stress.

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