Ms Unnati Enterprises Gstin vs. Commissioner State Goods And Services Tax Commissionerate

Facts

The petitioner is aggrieved by the cancellation of his GST registration, which was ordered on 12.09.2022. The reason cited for cancellation was that the petitioner was not found at his place of business during a field visit by the GST Department authorities. The petitioner contends that he was not provided with prior information as required by Rule 25 of the CGST Rules, 2017, and was not given an opportunity of hearing, contrary to the proviso to Section 29 of the CGST Rules, 2017. The petitioner sought a decision in line with a previous order dated 10.01.2024 passed in WMS No. 482 of 2023. The State Counsel did not dispute these submissions.

Held

The Court disposed of the writ petition, allowing the petitioner to make a representation to the Proper Officer within ten days from the date of the order for redressal of his grievance. The Court directed that if such a representation is filed within the stipulated time, the Proper Officer shall consider it and pass a decision in accordance with the law within four weeks thereafter. This implies that the Court acknowledged the procedural irregularities raised by the petitioner regarding the lack of prior notice and opportunity of hearing, as contemplated by Rule 25 and the proviso to Section 29 of the CGST Rules, 2017. The reasoning is based on the State Counsel not disputing the petitioner's submissions, suggesting an acceptance of the procedural infirmities. The ratio decidendi is that a GST registration cancellation without adhering to mandatory procedural safeguards like prior notice and an opportunity to be heard is unsustainable.

Key Issues

1. Whether the cancellation of GST registration is liable to be set aside for non-compliance with Rule 25 of the CGST Rules, 2017, which mandates prior information before a field visit? 2. Whether the cancellation of GST registration is liable to be set aside for violation of the proviso to Section 29 of the CGST Rules, 2017, which requires an opportunity of hearing to be provided? Petitioner's arguments: The petitioner argued that the cancellation of his GST registration was erroneous because the authorities failed to provide him with prior information as stipulated in Rule 25 of the CGST Rules, 2017. Furthermore, he contended that no opportunity of hearing was granted to him, which is a mandatory procedural requirement under the proviso to Section 29 of the CGST Rules, 2017. The petitioner relied on a previous High Court order in WMS No. 482 of 2023 for support. Revenue's arguments: The learned State Counsel did not dispute the submissions made by the petitioner.