Srikant Rai vs. The Assistant Commissioner Of CGST, Barrackpore And Khardah Division And Ors.

Held

The Court held that while the revenue authority claimed reasons were available, the show-cause notice itself was insufficient and lacked adequate supporting materials. The Court found that the principles of natural justice demand that a show-cause notice must contain reasons and materials to enable the recipient to provide an effective response. The Court directed the respondent CGST authorities to furnish detailed materials supporting the impugned show-cause notice within three days. The petitioner was granted liberty to file a reply within one week of receiving these materials. The authority was then directed to consider the response, pass a reasoned and speaking order, and provide an opportunity for a hearing within seven days of receiving the petitioner's reply. The Court did not decide on the ultimate validity of the cancellation or suspension of registration, but rather on the procedural deficiency of the initial notice.

Facts

The petitioner, Srikant Rai, filed a writ petition challenging a show-cause notice dated June 3, 2023, issued by the Assistant Commissioner of CGST, Barrackpore & Khardah Division, for the cancellation and suspension of his GST registration. The petitioner contended that the show-cause notice, issued in Form GST-REG-7, was non-speaking, lacked any reasons or supporting materials, and thus prevented him from providing an effective response. The revenue authority submitted that reasons were available in their records and uploaded to the portal, but the Court found these insufficient.

Key Issues

1. Whether the show-cause notice dated June 3, 2023, issued for cancellation of the petitioner's GST registration, is valid and compliant with the principles of natural justice, specifically concerning the requirement of providing reasons and supporting materials, as mandated by principles of natural justice and potentially Section 29 of the CGST Act, 2017, and relevant rules. Petitioner's Arguments: The petitioner argued that the show-cause notice was non-speaking, failed to provide any reasons or materials, and was issued simply in Form GST-REG-7, thereby violating the principles of natural justice and hindering their ability to file an effective response. Revenue's Arguments: The revenue authority contended that the reasons for issuing the show-cause notice were available in their records and had been uploaded to the portal. However, they did not explicitly name any specific provisions or precedents relied upon in their argument regarding the sufficiency of the notice.