Shree Pashupatinath Loha And Steel Traders Private Limited vs. State Of Chhattisgarh

Facts

The petitioner, Shree Pashupatinath Loha And Steel Traders Private Limited, received a show-cause notice on June 16, 2025, under Rule 21(a) of the Chhattisgarh Goods and Service Tax Rules, 2017. This notice was dropped on July 18, 2025, based on a State Tax Inspector's report. Subsequently, on August 21, 2025, the petitioner received another show-cause notice under the same rule, on the same grounds. The petitioner contended that this second notice lacked specific details regarding date, time, and retrospective cancellation. Despite this, the GST registration was cancelled retrospectively from September 5, 2024, by an order dated October 14, 2025. The petitioner sought to quash both the second show-cause notice and the cancellation order.

Held

The Court allowed the writ petition, quashing the show-cause notice dated August 21, 2025, and the consequential order dated October 14, 2025. The Court did not delve into the merits of the case. The reasoning was based on the concession made by the learned counsel for the State, who admitted to discrepancies in the show-cause notice and the subsequent order. The State's counsel indicated the department's willingness to recall the notice and order and to proceed afresh in accordance with the law. The ratio decidendi is that procedural irregularities, especially when conceded by the revenue, warrant the quashing of the impugned notices and orders, with liberty granted to the department to initiate fresh proceedings if advised. The operative direction was to quash the notice and order and dispose of the petition, granting liberty to the respondents to proceed afresh.

Key Issues

1. Whether the second show-cause notice dated August 21, 2025, issued under Rule 21(a) of the Chhattisgarh Goods and Service Tax Rules, 2017, is valid, considering it was issued on the same grounds as a previously dropped notice and lacked specific details regarding date, time, and retrospective effect of cancellation? Petitioner's Contention: The petitioner argued that the second show-cause notice was procedurally flawed as it did not specify the date and time for a hearing nor did it mention the retrospective cancellation of registration. They also highlighted that this notice was issued on the same grounds as the earlier one which was dropped. Revenue's Contention: The State's counsel conceded that there were discrepancies in the show-cause notice dated August 21, 2025, and consequently, in the impugned order dated October 14, 2025. The department was ready to recall both the notice and the order and proceed afresh.