Smti Jayati Kangsa Banik vs. The Union Of INDIA And 2 Ors

Held

The Court held that the Show-Cause Notice dated June 10, 2024, and the subsequent Order of cancellation dated July 4, 2024, were irregular and liable to be set aside. The Court found that the respondent authorities failed to adhere to the principles of natural justice by providing only seven days for the petitioner to reply to the Show-Cause Notice, instead of the thirty days stipulated in Rule 21A(2A) of the CGST Rules, 2017. The Court emphasized that a statute prescribing a particular manner for an act must be followed strictly. Additionally, the Show-Cause Notice was issued in Form GST REG-17, whereas Rule 21A(2A) mandates the use of Form GST REG-31 for contraventions of Rule 10A. The cancellation order was also passed prematurely, before the expiry of the thirty-day period. Consequently, the Court quashed the impugned notice and order and directed the restoration of the petitioner's GST registration.

Facts

The petitioner, Smt. Jayati Kangsa Banik, was granted GST registration on June 26, 2023, for her printing press business. On June 10, 2024, the Superintendent of Central Goods and Service Tax issued a Show-Cause Notice for cancellation of her registration, citing violations of Rule 10A read with Rule 21(d) of the CGST Rules, 2017. The notice required a reply within seven days and directed appearance on June 17, 2024. The petitioner claims she missed the notice due to portal uploading. Subsequently, on July 4, 2024, the Superintendent passed an order cancelling the registration, noting no reply was received. The petitioner's attempts to upload bank details and file for revocation were unsuccessful due to expired limitations.

Key Issues

1. Whether the Show-Cause Notice issued for cancellation of GST registration, which provided only seven days for reply and directed appearance, violated the principles of natural justice and the provisions of Rule 21A(2A) of the CGST Rules, 2017, by not affording the statutorily prescribed thirty days for explanation? Petitioner's arguments: The petitioner contended that the Show-Cause Notice was issued in Form GST REG-17 instead of the prescribed Form GST REG-31. Furthermore, the notice provided only seven days to reply, which is significantly less than the thirty days mandated by Rule 21A(2A) for a person to explain non-compliance with Rule 10A. This curtailment of time deprived the petitioner of a reasonable opportunity to be heard, thus violating principles of natural justice. The order of cancellation was also passed before the expiry of the thirty-day period. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or State.