Bombay High Court Restores Trader's GST Registration After Defective 'Cyclostyled Notice'

The Kolhapur Bench of the Bombay High Court recently restored the cancelled GST registration of a trader, observing that the grounds cited in the show‑cause notice and those relied upon in the cancellation order were materially different.

A Bench of Justice R.G. Avachat and Justice Ajit B. Kadethankar examined the effect of retrospective cancellation of GST registration and emphasised the need to issue a reasoned notice rather than a generic, template-based communication.

The Bench observed:

“Upon perusal of the record, it reveals that the show-cause notice is nothing but a cyclostyled notice issued by the concerned authority. We are constrained to observe that the responsible authority has not even adverted to the contents of the show-cause notice nor to the reply filed by the petitioner while passing the impugned order. The show-cause notice and the impugned order disclose serious discrepancies, which are apparent on the face of the record.”

The Department sought to cancel the GST registration of Om Enterprises, a trader, on the ground that it was obtained by fraud. However, there were certain inconsistencies between the show-cause notice and the cancellation order. These included the allegations levelled against the trader and the amounts mentioned under various heads of the cancellation order, some of which reflected '0'.

The GST Department contended that the cancellation was legal and that the trader had a remedy of revocation under Section 30 of the CGST Act. The trader, on the other hand, argued that discontinuation of business had not been considered.

Rejecting the Department's reliance on the remedy of revocation, the Bench held that the officer had acted in a casual and mechanical manner, causing unnecessary litigation for the trader and warranting costs. The Court observed that the registration was cancelled retrospectively based on information from the State GST Authority that the trader was “not genuine,” whereas the show-cause notice had alleged fraudulent procurement.

The Bench emphasised that, although writ jurisdiction is generally not exercised where statutory remedies exist, the authority's failure to properly exercise its jurisdiction in this case warranted judicial intervention.

Accordingly, the High Court restored the trader's GST registration.