M/S Himanshi Enterprises vs. Pr. Commissioner Of Goods And Service Tax, East Delhi, Delhi

Facts

The petitioner, M/s Himanshi Enterprises, challenged an order dated October 17, 2024, passed by the Principal Commissioner of Goods and Service Tax, East Delhi, cancelling its GST registration. Proceedings were initiated under Section 29 of the CGST Act, 2017, based on a show cause notice dated September 19, 2024. The notice cited "others" as the reason for cancellation, specifically mentioning a communication dated September 11, 2024, from the Anti Evasion CGST, Delhi East, stating the firm was non-existing/untraceable. The petitioner admitted failure to reply to the show cause notice but contended that the communication forming the basis of the cancellation was never supplied or uploaded, and an independent opportunity of hearing was not provided, despite the notice mentioning an appearance date of September 26, 2024. The petitioner also claimed its place of business was in existence.

Held

The Court held that the impugned order cancelling the petitioner's GST registration suffered from violations of the principles of natural justice. Two key aspects were established: (a) the document along with the show cause notice was never served on the petitioner, and (b) a specific opportunity of hearing was not offered. Consequently, the Court allowed the petitioner to submit their response to the show cause notice by March 9, 2026, with no further extensions. The petitioner was also directed to appear before the appropriate authority, the Superintendent Range-150, on March 9, 2026, with written submissions. The authority was instructed to pass a fresh order, if required, after carrying out field visits and verification. The Court noted the petitioner's failure to show cause or submit a reply to the show cause notice and imposed a cost of ₹10,000/- payable by the petitioner to the respondent, which was made a condition precedent for submitting the written submissions. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order cancelling the petitioner's GST registration is vitiated by a violation of the principles of natural justice, specifically concerning the non-supply of the supporting communication and the lack of an independent opportunity of hearing, as contemplated under Section 29 of the CGST Act, 2017? Petitioner's Arguments: The petitioner argued that the cancellation order was bad in law because the communication from the Anti Evasion unit, which formed the basis for the show cause notice, was not provided to them. Furthermore, they contended that a proper and independent opportunity of hearing was denied, as the show cause notice merely indicated an appearance date without a clear indication of an independent hearing process. They also asserted that their place of business was indeed in existence. Respondent's Arguments: The respondent contended that the impugned order was passed in accordance with the requirements of Section 29 of the CGST Act, 2017.