M/S Sk Engineering vs. Union Of INDIA And 2 Others

Held

The Court held that the show cause notice dated 24.05.2025 was invalid and could not be sustained. The Court found the GSTN advisory relied upon by the revenue to be misplaced in this context. While the advisory might explain situations where the name and office of the issuing authority are indicated, it does not justify a notice that bears neither the name nor the office of the issuing authority, and is merely indicated as 'system generated'. The Court reasoned that the power to issue such notices vests with officers, not the system. Therefore, a system-generated notice lacking the name and office of the issuing authority cannot be justified. Consequently, the show cause notice and the subsequent order cancelling the petitioner's GST registration were quashed. The Court also directed that the respondents are free to issue a fresh notice in accordance with law, if the occasion arises. The issue of whether the petitioner had indeed failed to furnish returns for six continuous months was not decided on merits.

Facts

The petitioner, M/S Sk Engineering, filed a writ petition challenging an order dated 11.09.2025 that cancelled its GST registration. The cancellation was based on a show cause notice dated 24.05.2025, alleging failure to furnish returns for six continuous months. The petitioner's registration was suspended from 24.05.2025. The petitioner argued that the show cause notice was invalid because it was system-generated and did not bear the name or office of the issuing authority, contending that such authority vests in officers, not the system. The revenue relied on an advisory from GSTN regarding notices/orders without digital signatures, stating it was not necessary for orders to bear digital signatures if the authority logged in with one.

Key Issues

1. Whether a system-generated show cause notice for cancellation of GST registration, which does not bear the name or office of the issuing authority, is valid in law, particularly in light of the provisions of the CGST Act and Rules? Petitioner's contention: The petitioner argued that the show cause notice dated 24.05.2025 was contrary to law as it was system-generated and lacked the name and office of the issuing authority. They asserted that the power to issue such notices vests in officers, not in the system, making the consequential order of cancellation liable to be quashed. Revenue's contention: The revenue relied on a GSTN advisory indicating that notices/orders issued after the authority logs in with a digital signature do not necessarily require the order itself to bear digital signatures. They argued this advisory justified the issuance of the notice.