Radhakrishna Scrap Traders Through Its. Prop. Hasmukhbhai Gulabji Regar vs. State Of Gujarat

Facts

The petitioner, Radhakrishna Scrap Traders, filed a writ-application challenging a show-cause notice dated November 10, 2021, and an order dated December 21, 2021, passed by the Commercial Tax Officer, Ghatak 18, Range 5, Division 2 (Ahmedabad), Gujarat. The show-cause notice alleged that the business place, business activity, and proprietor were not found at the time of a field visit, leading to the suspension of the petitioner's GST registration. The subsequent order cancelled the registration effective November 30, 2021, stating the reason as 'YOU HAVE TAKEN CANCELLED DEALERS PURCHASE', with no tax, interest, or penalty amounts determined as payable. The petitioner sought to quash these proceedings and restore their registration.

Held

The Court held that the show-cause notice and the impugned order were vague. The Court referred to its own prior decision in Aggarwal Dyeing and Printing Works vs. State of Gujarat & 2 Ors., which addressed similar issues of vagueness in GST registration cancellation proceedings. Following this precedent, the Court found the proceedings initiated against the petitioner to be unsustainable. The Court quashed and set aside the show-cause notice and the order cancelling the petitioner's GST registration. The registration was ordered to be restored. The Court also directed that if the department wished to proceed further, it must do so strictly in accordance with the law and keeping in mind the observations made in the Aggarwal Dyeing and Printing Works case.

Key Issues

1. Whether the show-cause notice dated November 10, 2021, and the consequent order dated December 21, 2021, cancelling the petitioner's GST registration are liable to be quashed and set aside on grounds of vagueness and non-compliance with procedural requirements, as stipulated under the CGST Act and Rules. Petitioner's arguments: The petitioner contended that both the show-cause notice and the impugned order were vague and lacked specific details, rendering them unsustainable. They relied on the High Court's decision in Aggarwal Dyeing and Printing Works vs. State of Gujarat & 2 Ors., Special Civil Application No.18860 of 2021, decided on February 24, 2022, which dealt with similar issues of vague notices and orders in GST registration cancellation proceedings. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or State.