Ms Turret Industrial Security PVT LTD Through Its Director B P Upadhyay vs. Union Of INDIA Through The Principal Commissioner Central Goods And Service Tax

Held

The Court held that the show cause notice in Form GST REG-17, issued under Rule 22(1) of the CGST Rules, 2017, was fundamentally flawed due to the complete absence of an appointed date and time for the petitioner to furnish a reply. Consequently, the petitioner could not file a proper reply, and the subsequent ex parte order of cancellation of registration dated 13.03.2020 was unsustainable as it violated the principles of natural justice. The Court found that the impugned order incorrectly stated that the petitioner had not responded to the show cause notice, despite the notice itself being defective. Therefore, the Court quashed the order of cancellation of registration. The Court also noted that the respondents may proceed in accordance with law if the law permits, implying that a fresh, valid show cause notice could be issued if permissible.

Facts

M/s Turret Industrial Security Pvt. Ltd. (Petitioner) filed a writ petition challenging the ex parte order dated 13.03.2020, issued by the Superintendent, CGST & Central Excise, Jamshedpur (Respondent No. 4), cancelling its GST registration. The cancellation was based on the failure to file six monthly returns from August 2019 to January 2020. The Petitioner claimed it had filed GSTR-I but could not file GSTR-3B due to non-payment from clients. The Petitioner also challenged a subsequent letter dated 13.07.2020 from Respondent No. 3 declining revocation and a letter dated 17.07.2020 from Respondent No. 4 demanding GST liability of Rs. 1,82,01,863/- and interest of Rs. 32,30,155/-.

Key Issues

1. Whether the show cause notice for cancellation of GST registration, issued in Form GST REG-17 under Rule 22(1) of the CGST Rules, 2017, was a valid notice in the eye of law, considering the absence of an appointed date or time for the petitioner to furnish a reply? (Question of law) 2. Whether the ex parte order of cancellation of GST registration dated 13.03.2020, issued by the Superintendent, CGST & Central Excise, Jamshedpur, was sustainable in light of the alleged infirmities in the show cause notice and the principles of natural justice? (Question of mixed law and fact) Petitioner's Arguments: The Petitioner argued that the show cause notice (Annexure-1) was invalid as it lacked a specific date and time for reply, rendering it not a notice in the eye of law. The cancellation order (Annexure-2) was also flawed, as it incorrectly stated that the petitioner had not responded to the notice. The Petitioner relied on the Gujarat High Court's decision in "Mahadev Trading Company Vs. Union of India" for similar circumstances. Respondents' Arguments: The Respondents contended that the Petitioner did not respond to the show cause notice and failed to file GSTR-3B returns for the period August 2019 to January 2020. They argued that a reply was to be filed electronically in Form GST REG-18 under Rule 22(2) read with Section 29(2)(c) of the CGST Act, 2017. They also claimed the Petitioner was a habitual defaulter and that payment of GST liability in installments is not permitted. The Respondents attributed the absence of date and time in the show cause notice and the observations in the cancellation order to technical errors.