M/S. Sivicon Life Sciences Private Limited vs. Superintendent Of Central Tax

Facts

The petitioner, M/s. Sivicon Life Sciences Private Limited, filed a writ petition challenging the order of cancellation of its GST registration dated March 23, 2023, passed by the Superintendent of Central Tax, Malkajgiri, and the subsequent order dated August 10, 2023, passed by the Additional Commissioner Appeals-I, Hyderabad, rejecting the petitioner's second appeal. The petitioner contended that the cancellation of registration was done without issuing a show cause notice, violating principles of natural justice. The delay in filing returns was attributed to the death of the petitioner's Chartered Accountant, of which the petitioner was unaware. The petitioner expressed readiness to pay any applicable late fees and sought restoration of its registration.

Held

The Court allowed the writ petition, setting aside both the order of cancellation of registration dated March 23, 2023, and the order rejecting the appeal dated August 10, 2023. The Court reasoned that the cancellation of registration was done without adhering to the principles of natural justice, specifically the requirement of issuing a show cause notice. The Court found merit in the petitioner's submission regarding the delay in filing returns due to the death of their Chartered Accountant. Following the precedents set by the Division Bench of the High Court in similar cases, particularly W.P.No. 25671 of 2023, the Court remitted the matter back to the Superintendent of Central Tax (Respondent No. 1). The petitioner was directed to pay the requisite late fees for the delayed submission of returns, and upon such payment, the Superintendent was to consider the request for restoration of the registration. The Court also held that the issue of limitation should not impede the petitioner's request for restoration. No order as to costs was made.

Key Issues

1. Whether the cancellation of GST registration without issuing a show cause notice is violative of the principles of natural justice, as contemplated under the relevant provisions of the CGST Act and Rules? 2. Whether the rejection of the petitioner's appeal by the Additional Commissioner Appeals-I, Hyderabad, was justified, considering the circumstances leading to the cancellation of registration? Petitioner's Arguments: The petitioner argued that the cancellation of registration was arbitrary, illegal, and contrary to the principles of natural justice due to the absence of a show cause notice. They relied on several decisions of the Division Bench of the High Court, including W.P.Nos. 35040 and 350711 of 2022 and W.P.No. 341126 of 2022, which dealt with similar issues. The petitioner also highlighted a recent decision by the same bench in W.P.No. 25671 of 2023, where cancellation of registration was set aside subject to payment of late fees. Revenue's Arguments: The judgment records that the legal precedents cited by the petitioner were not disputed by the learned Standing Counsel for the Department.