M/S. Motivity Labs Private Limited vs. The Union Of INDIA
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The petitioner, M/s. Motivity Labs Private Limited, filed a writ petition before the High Court for the State of Telangana challenging a show cause notice dated 16.10.2024, issued by the Deputy State Tax Officer (Respondent No. 3) under the provisions of the CGST Act, 2017 and TGST Act, 2017. The notice was for the cancellation of the petitioner's GST registration. The petitioner also filed an interim application seeking a direction for the respondent to consider their reply dated 18.10.2024 and 30.01.2025. The respondents included the Union of India, the State of Telangana, the Deputy State Tax Officer, and the Commissioner of State Goods and Services Tax.
Held
The Court held that the impugned show cause notice dated 16.10.2024 was cryptic in nature. The Court accepted the submission made by the learned Special Government Pleader for State Tax, who conceded that the notice was indeed cryptic. Consequently, the Court set aside the impugned show cause notice. The Court also clarified that the suspension of the petitioner's registration, which was part of the impugned notice, would stand revoked. The Department was granted liberty to issue a fresh show cause notice to the petitioner in accordance with the law. The Court did not decide on the merits of any potential future notice or the petitioner's replies, as the primary issue was the deficiency in the existing notice. The ratio decidendi is that a show cause notice must be clear, specific, and provide sufficient grounds to enable the assessee to respond effectively, failing which it is liable to be quashed.
Key Issues
1. Whether the show cause notice dated 16.10.2024, issued by the Deputy State Tax Officer for cancellation of GST registration, is legally sustainable in its current form, considering the petitioner's contentions regarding its cryptic nature and the pendency of their replies. This issue turns on the principles of natural justice and the procedural requirements for issuing such notices under the CGST Act, 2017 and TGST Act, 2017. Petitioner's Arguments: The petitioner contended that the show cause notice was cryptic and lacked sufficient detail, thereby violating principles of natural justice. They also highlighted that their replies to the notice were pending consideration by the authorities. Revenue's Arguments: The learned Special Government Pleader for State Tax fairly submitted that the impugned show cause notice was cryptic and requested that it be set aside, with the department being allowed to issue a fresh, proper notice to the petitioner. The revenue did not advance arguments against the petitioner's primary contention regarding the notice's deficiency.
Sections Cited
CGST Act, 2017, TGST Act, 2017
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Cause title — parties, addresses and appearances
The Court mtde the foflowing: ORDER
7 \ THE TION'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE SMT. .TUSTICE RENI'I(A YARA WRIT PETITION No.5633 of 2o25 ORDER (Per the Hon'ble ttle Acting Chief Justice SuioA Paul): Sri Kailash Nath P.S.S., learned counsel for the petitioner; Sri B. Mukherjee, learned counsel represents Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.l and Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondent Nos'2 to 4'
With the consent, frnallY heard. 3. tearned Special Government Pleader for State Tax, at the outset, fairly submits that the impugned show cause notice for cancellation of registration dated 16.10 '2024 (Annexure-P 1) is cryptic in nature and therefore, the said notice may be set aside and Department will issue a fresh proper notice to the petitioner' With this direction, this Writ Petition may be disposed of'
Learned counsel for the petitioner has no objection'
Accordingly, the impugned show cause notice dated L6.1O.2O24 is set aside by reserving liberty to the Department to issue a fresh show cause notice to the petitioner in accordance with law. Needless to emphasize that the suspension of I t
2 petitioner's regis tration which is part of the impugnr:d show cause notice also stands revoked. 6 Accordingly, the Writ petition is disposed of. I'Lt costs. Interlooli<;l-y applications, stand.closed. if any pending, sh,ajl also //// K. SREE RAMA MURTHY ASSISTANT REGISTRAR sfiON OFFICER I To, TJ BS & 1 2 J 4 The Secretary -l'he Union of lndia, t\tlinistry of Finance Departrnent of Revenue, 15,'safdarjung Road, New Delhi - 1 '1000'1 New Delhi The Secretary, I he State of Telangana, Department of Revenue (Commercial Tax ). Secretariat, Hvderabad. the Deputy State Tax offlcer, Madhapur lll Circle 4th Floor Gagan Vihar Complex Nampally Hyderabad TS 500001 The bommissic,ner of State Goods and Services Tax, Nampally tlyderabad s00001 O.,ne CQ to Sri Kailash Nath P, S. S. Advpcate IOPUCI One CC to Sri Gadi Praveen Kumar Dy. $olicitor Gen. o[ lndia IQPUQ] two CC to The Special GP fqr State Iax, High Court for the State of Tirlangana, at l-lyderabad[OUT] Two CD Copies. 5 0 7 E t
HIGH COURT DATED:2710212025 ORDER WP.No.5633 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS (t' tt{g SI4 ,/.i .' c.-) G Ll 6( I 2 4 ilAn 2025 y ( il *(:. n.. \ I'ATC i o gf, @ oril"'- I I
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.