BharatTaxGST

M/S. Elecon Trading Company vs. The Deputy State Tax Officer

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WP/17633/2023HC TelanganaGSTCNR HBHC01032124202307 July 2023Bench: N.TUKARAMJI,UJJAL BHUYAN7 pages
AI SummaryAllowed

Facts

The petitioner's GST registration was cancelled by the respondent on July 1, 2023. This cancellation occurred before the scheduled personal hearing date of July 6, 2023, as granted in the show cause notice. The petitioner was not provided an adequate opportunity to be heard.

Held

The Court held that cancelling the registration before the scheduled hearing date and issuing a vague show cause notice violates the principles of natural justice. The Court found the proceedings to be ex facie illegal and unjust.

Key Issues

Whether the cancellation of GST registration without providing a proper opportunity of being heard and based on a vague show cause notice is valid. Whether prepending the hearing date and cancelling registration before the scheduled date is arbitrary and illegal.

Sections Cited

Central Goods and Services Tax Act, 2017

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[ 3311] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY ,THE SEVENTH DAY OF JULY TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 17633 OF 2023 Between: M/s. Elecon Trading Company, F-7lA, Baba Cafe Point, Road No.12, Nacharam, Hyderabad.State of Telangana. Rep. by its Proprietor I\Ir.K.Lakshmi Narasimham ...PETITIONER AND 1. The Deputy State Tax Officer, Ramgopalpet-Ranigunj Circle, Hyderabad. 2. The Assistant Commissioner (ST), Ramgopalpet-Ranigunj Circle, Hyderabad. 3. The State of Telangana, Rep. by its Principal Secretary, Revenue (CT) Department, Telangana secretariat, Hyderabad. ...RESPoNDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavlt filed therewith, the High Court may be pleased to issue Writ of Mandamus or any other appropriate Writ or Order or direction declaring the action of the 1st Respondent in issuing the Order for Cancellation of Registration in Form GST REG-19, dated 011O712023, without waiting till 0010712023 for the personal hearing date as was granted in Show Cause Notice, without providing an opportunity of being heard to the Petitioner, as arbitrary, contrary to the provisions of the Central Goods and Service Tax Act 2017, and in Violation of Principles of Natural Justice and Rule of Law and contrary to Article 1a, 19(1Xg) and 21 of the Constitution of lndia and consequently set aside the Order for Cancellation of Registration in Form GST REG-I9, dated 0110712023 passed by the 1st Respondent, as not valid in the eye of law lA NO: 1 OF 202t Petit on r-r rd :r Section 151 CPC praying that in ll'e crrr;umstances stated in the affid avit f i r:c irr support of the petition, the lligh Cc,.rrt rnay be pleased to suspend the op. ration of the Order for Cancellation of R,:i rstrltion in Form GST REG-19, clztlecl D'lO7l2023 issued by the 1st Rospon,J€)nt and direct the 1't Respondent tc Rostore the Registration Certificirte ol .he Petitioner, in the interest of Justi, e and equity, pending disposal of the, al,ovr: Writ Petition, as otherwise, the F' )t .ioner will be put to severe loss and ha-d ;hi1r Counsel for the )etitioner: SRl. SHAIK JEELANI BASHA Counsel for the l(,spondents: SRl. L. VENKATESWAR FILO

The Court made tl'e following: ORDER

THE HON'BI-E THE CTIIEF JUSTICE UJJAL BHIIYAN AND THE HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No. 17633 of 2O23 ORDER: Per the Hon'ble rhe Ctref JustLce Urat Bhuvan) Heard Mr. Shaik Jeelani Basha, learned counsel for the petitioner and Mr. L.Venkateswar Rao, learned counsel for the respondents

2.

By filing this petition under Article 226 of the Constitution of India, petitioner has assailed iegality and validity of the order datcd OI.O7 .2023 passed by respondent No.l cancelling the goods and services tax (GST) registration of the petitioner.

3.

Learned counsel for the petitioner has drawn our attention to the show cause notice dated 26.06.2023 which, according to him, is extremely vague.

\ ?is \ ,,: .+. Bc r.hir1 rrs it rn;i1 , as ller the shor'' (tlL,ri ' iI,)tlr, pctitioucr \r {) i directe(l to appear belbrt: r.--s1rr,r'rc:'n1 No on 06.01; f O-l I ,Lt 1 1:3O a,m. t)n rlre date of issu rr ce o1'tltc shorv c:r LrsC it;trr:c, CliT registration of lht pc'riri,rnrr' \\ ii:; suspcndld. 1r)rvever, r:r,en before 06.O7.2023. r'r:;qicnde'r1 thc CIiT rci3is:ration of Lhe petitioner

5.

Thiiurli': l.--arned r:our-rsel tbr the rcsponclea S siought for tinre to o )1 ain instructtorr, we are of tlre l'itu that thcr order d:rlc,l )'. A7.2()23 rcad ri'ilh the shovr. ci i- sc tloliLe d:rtecl 2t).()6.,1(t2.1 are ax facie tllegal. When arr au.horil.\ fixcs a <lat,: rf hr:aring, it would not be.;ur;t an,l pr(,per to hear and l,:::i le the rnatter on a date p-ior 1o the date which is nc,- li,:d. That apart, even the shoq ,:;rr se rlotice appears t() re quite vague inasmuch as petrti,)n( r was asked to shc r, cause as to lvhy its GST reg;is1ra.r,,n ;hoLrld

not be cancelled for '*'rongful availment of input tax credit (lTC). The show cause notice is silent as to the quantum of ITC allegedly availed of wrongfully by the petitioner and for which period. A show cause notice must contain the necessary details. Then only the noticee can give an effective reply to the show cause notice. In the absence of such material particulars, the show cause notice would be incomplete. Such a proceeding would be in violation of the principles of natural justice; and then to prepone the hearing and cancel the registration is wholly unjust.

6.

That being the position, we set aside the show cause notice dated 26.06.2023 as well as the impugred order of cancellation dated 01.07.2023. However, it would be open to respondent No. 1, in the event he has materials in his possession, to put the petitioner on notice regarding any violation of the Central Goods and Services Tax Act, 2Ol7 and the Telangana Goods and Services Tax Act, 2017. I I

l :g .,;i

7.

Sul .jec r c the alror c, rvrit petition is allou-cd NIjs: t:llr it.or-ts applit:atiotrs perlciing, if ; n , . shaii stand closcil Hol. evcr. thr.:re slrail be no orcier as 1 ) clsts //// K. SI.IEE RAMA MURT\ ASS S TAI{T REGISTRAR , !',-, :iiECTION OFFICER To,

1.

The Deoutv l: la e Iax Off cer, Ramgopalpet-Ranigyun.i C rc e, llyderabad.

2.

The Assistanl Conlmissioner (ST), Ramgopalpet-Flanigu nj Cir':le, Hyderabad

3.

The Princit,al S(]crelary, State of Telangana, Reve nue ({)1') D,-.partment, Telangzrna Sr cretariat, Hyderabad.

4.

One Ctr to SIll L VENKATESWAR RAO, Advoc:rte [Ot'LlC]

5.

One C() to S Ll SHAIK JEELANI BASHA, Advocarte [OI'tiC]

6.

Two CD Co[,i ;s BM S\N ,/ g i

I I HIGH COURT DATED:07 t02,2023 ORDER WP.No.17633 ,>l'2023 I,\ I'I ai , I a':J .J 1 \ ; , \l[ r.l[J :1,' - ^'l '--'--. oaa \ ll -: ,/ .: // ALLOWING TIIE WRIT PETITION WITHOUT COS TS -.."Y\ v9 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.