Subhash Chand vs. The Deputy State Tax Officer
Original PDF →Facts
The petitioner, whose GST registration was cancelled, filed a writ petition before the High Court of Telangana. The cancellation order was issued by Respondent No. 1, the Deputy State Tax Officer. The impugned order dated 22.08.2024 cancelled the petitioner's registration. The petitioner challenged the show-cause notice (Form GST REG-17 dated 10.05.2024) and the subsequent cancellation order (Form GST REG-19 dated 22.08.2024) as void, arbitrary, illegal, and violative of natural justice and constitutional provisions. The petitioner contended that the cancellation was based on a cryptic reason without providing factual details of the alleged breach.
Held
The Court held that the show-cause notice and the final order for cancellation of registration were not sustainable. The Court observed that the respondents had solely relied upon Rule 21(e) of the GST Rules without providing any factual foundation for issuing the notice. The nature of the breach was not spelled out, rendering the notice and the final order liable to be set aside. The Court noted that in several similar matters, interference had been made, yet the respondents continued to pass such cryptic orders. Consequently, the show-cause notice and the order dated 22.08.2024 were set aside. The Court reserved liberty for the respondents to proceed against the petitioner in accordance with law. The Court explicitly stated that it was not expressing any opinion on the merits of the case.
Key Issues
1. Whether the show-cause notice and the order of cancellation of GST registration are sustainable in law when they merely reproduce a statutory rule without providing specific factual details of the alleged breach by the petitioner? (Question of law turning on principles of natural justice and procedural fairness). Petitioner's Arguments: The petitioner argued that the singular reason assigned for cancellation, which was a mere reproduction of Rule 21(e) of the GST Rules, was cryptic and lacked any factual foundation. They contended that the absence of specific reasons in the show-cause notice rendered both the notice and the final order unsustainable. They relied on the principle that a mere reproduction of a statutory rule is insufficient for issuing a notice and that the nature of the breach must be clearly spelled out. Revenue's Arguments: The other side (respondents) supported the impugned order.
Sections Cited
Rule 21(e)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the fbllowing ORDER
THE HONOURABLE SRI JUSTICE SUJOY PAUL AND THE HONOURABLE DR. JUSTICE G.RADIrA RANI 1VRIT PETITION No.53 OF 2o25 ORDER: (per Hontble Si Justice SujoA Polll) Sri V.Veeresham, learned counsel for the petitioner and Sri T.Chaitanya Kiran, learned Assistant Government Pleader' representing learned Special Government Pleader for State Tax' for respon d ents.
With the consent, finallY heard' 3.Thepetitionerassailstheorder,dated22'OB'2O24'whereby' his registration is cancelled'
Learned counsel for the petitioner submits that the singular reason assigned for cancellation is cryptic and does not give any factual details about alleged breach on the part of the petitioner' Mere reproduction of statutory Rule is not sufficient for issuing a notice' In the absence of furnishing reasons, the show-canrse notice and final order are not sustainable'
The other sid.e supported the impugned order'
In the show-cause notice and Iinal order' the following reasons are recorded' ( I (
Tl 2 " Whet'eas no reply to the show cause notice has been submitted and whereas, the undersigned based on record available with the ofhce is of the opinion th:rt your registratiorL is liable to be cancelled for following reason(s). I . Jlule 2 1 (e)-person avails ITC in violation. of the provisicns of section 16 of the Act or the rules made thereu:eder. "
A conjoint reading of show-cause notice an<l order for cancellation of registration shows,that the respondents have solely relied upon Rule 21(e) of the GST Rules and have not given factual foundation, on the strength of which, said notice rvas issued. Thtrs,.ngture of breach is not spelled out. Thus, the notice and { :; j.., , final order can: not sustain judicial scrutiny. In sevr:ral similar matters, interfr:rence has been made, but, still the r.espondents are passing sinrilar cryptic orders, which cannot sustain judicial scrutiny.
ResultantJy, the show-cause notice antd order dated 22.O8.2,C'24 are set aside. Liberty is resen,ed to the respondents t. proceed against the petitioner, in accordance with law.
Accordingly, the Writ petition is disposed of, without expressing an)' opinion on the merits of the case. No order as to costs. \ ( t -..i4. ---l ':!1
3 Miscellaneous petitions pending, if any, shall stald closed' .K. SREE RAMA MURTHY ASSISTAN REGISTRAR //// S N OFFICER To 1. The-Deputy State Tax Officer, Saroomagar-lll Circle, Saroomagar Division, ^ 9l! fl:gl Mayur KushatComptex,Abids, (Chermas Buitdins) iiOeraUaO. ' z. I he commissioner of State Tax, C.T.Complex, Opposite Glnd-hi Bhavan, _ M.J. Road, Hyderabad, Telangana - S00 Ob1. ' ' '
The Principal secretary.to G_oiernment, Revenue Department (commerciar I ax), Secretariat Complex,.State of Telangana at Hyderabad, ielangana.
One CC to SRt V.VEERESHAM nOvocaidt-OFuci
ONE CC tO SRI T.CHAITANYA KIRAN, AGP REPRESENTING SPECIAL GOVT PLEADER FOR STATE TAX Advocate tOpUCl
Two CD Copies SA BS
I HIGH COURT DATED:0610112025 ORDER WP.No.53 of 2025 DISPOSING OF THE W.P WITHOUT COSTS. t l. /t {+// /z/ -'' i:hi .{- ((\(' ma5 rl E F[8 ..1": 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.