Mr Moin Khan vs. Superintendent

Held

The Court held that the Show Cause Notice was defective and consequently, the Order of Cancellation must also fail. The Court reasoned that a Show Cause Notice, intended to provide a reasonable opportunity to the noticee, must contain sufficient details to enable the noticee to respond to the proposed action. In this case, the notice merely cited 'Others' and referred to a DGGI letter without providing the specific grounds for cancellation. The petitioner's request for these reasons was not addressed, and the cancellation order was issued without adequate disclosure. Therefore, the petitioner was denied a reasonable opportunity to present his defence. The petition was allowed, but the Court clarified that this outcome does not preclude the initiation of fresh proceedings if the petitioner has indeed availed ITC from cancelled registrations, provided the petitioner is put on definite notice of such transactions.

Facts

The petitioner, Mr. Moin Khan, filed a writ petition challenging the order dated 29.05.2026 cancelling his GST registration, passed by the Superintendent, Central Goods and Services Tax. The petitioner also challenged the Show Cause Notice dated 28.04.2026, issued by the same authority, proposing the cancellation. The petitioner's counsel argued that the Show Cause Notice was defective and denied him a reasonable opportunity to respond. Specifically, the notice cited 'Others' as the reason for cancellation, referencing a letter from the Directorate General of GST Intelligence (DGGI) without providing further details. The petitioner requested the specific reasons, but no response was given before the cancellation order was issued. The cancellation order again referred to the DGGI letter and stated that the petitioner's suppliers were cancelled and he had received Input Tax Credit (ITC) from them.

Key Issues

1. Whether the Show Cause Notice dated 28.04.2026, issued under Section 29 of the CGST Act, 2017, is defective for failing to provide specific reasons for the proposed cancellation of GST registration, thereby denying the petitioner a reasonable opportunity to be heard as mandated by principles of natural justice? Petitioner's Arguments: - The Show Cause Notice was vague, stating 'Others' as the reason for cancellation and only referring to a letter from the DGGI without disclosing its contents or specific grounds. - The petitioner's request for clarification of the reasons was ignored. - The subsequent cancellation order was also based on unspecified reasons and the DGGI letter. - Reliance was placed on judicial pronouncements holding that cancellation of GST registration cannot be based on external communications without informing the registered taxable person of the specific reasons. Respondent's Arguments: - The judgment does not record any specific arguments made by the respondent's counsel.