Delhi High Court Sets Aside Rejection Of GST Cancellation Revocation Plea Over Unidentified Officer

The Delhi High Court has set aside an order rejecting a taxpayer's application for revocation of cancellation of its GST registration, after finding that the notice granting an opportunity of personal hearing did not disclose the details of the officer before whom the taxpayer was required to appear.

The Division Bench of Justices Anil Kshetarpal and Amit Mahajan directed the GST authorities to grant the taxpayer a fresh opportunity of personal hearing and thereafter pass a fresh order on its revocation application.

The case concerned Radhe Sales Corporation, whose GST registration was cancelled on March 22, 2024. According to the petition, the cancellation was ordered retrospectively from April 9, 2018, the date on which the firm's GST registration was granted.

The petition stated that the GST Department had earlier issued a show cause notice to the firm on May 19, 2023, alleging that its registration had been obtained through fraud, wilful misstatement or suppression of facts under Section 29(2)(e) of the CGST Act.

Petitioner contested the allegation, following which the Department, by an order dated July 11, 2023, vacated the cancellation proceedings and restored the GST registration.

However, according to the petition, the Department issued another show cause notice on March 7, 2024, alleging the same ground under Section 29(2)(e). Petitioner alleged that the fresh notice was vague and did not bear the signature of the issuing authority. It also required the Petitioner to appear before the "undersigned" without identifying the officer by name, designation or contact details.

The registration was subsequently cancelled on March 22, 2024, retrospectively from April 9, 2018. Petitioner then applied for revocation of the cancellation on April 16, 2024.

The Department issued a further notice on the same day proposing rejection of the revocation application. The petition alleged that this notice also failed to provide a fair opportunity of hearing. The revocation application was ultimately rejected on April 29, 2024.

Petitioner challenged the cancellation proceedings on several grounds, including that the second show cause notice was issued on the same ground on which the earlier proceedings had already been dropped and the registration restored.

It also argued that the show cause notice did not contain specific allegations, was unsigned, and failed to properly identify the authority before whom Petitioner was required to appear.

Petition further relied upon Section 29(2) of the CGST Act read with Rule 22 of the CGST Rules to contend that a cancellation notice must specify the reasons for the proposed cancellation and provide an effective opportunity of hearing.

Petitioner also challenged the retrospective cancellation, contending that the March 7, 2024 show cause notice did not indicate that the registration was proposed to be cancelled retrospectively.

While considering the matter, the High Court focused on the notice dated April 16, 2024, issued in connection with Petitioner's application for revocation.

It noted that although the notice did grant an opportunity of personal hearing, it merely stated that the petitioner was required to appear before the "undersigned", without disclosing the details of the officer concerned.

“In the peculiar facts and circumstances of the present case,” the Court directed the authorities to pass a fresh order.

For Petitioner: Advocates RP Singh, Rahul Ranjan, Aman Sinha and Prashasti

For Respondent:  Advocate Aditya Singla, SSC, CBIC with  Arya, Dhananjay Gautam, Akhil Sharma, Sakshi Chandna and Nehaol, Advs.