Cancellation of GST registration without assigning reasons in the show cause and the order – Illegal

By the show-cause notice dated 27.7.2022, not only the petitioner was asked to show cause as to why GST registration should not be cancelled but the registration was also suspended with effect from 27.7.2022.

The petitioner replied the said notice on 31.7.2022 and also raised the contention that the show cause notice did not furnish any reason.

By the impugned order dated 11.11.2022, the registration was cancelled retrospectively from 26.11.2022.

In the affidavit in reply filed by the Revenue, the details and information revealed in the investigation on fake Input Tax Credit (ITC) and the petitioner had fraudulently availed fake ITC of Rs.13.96 crores from another trader whose registration was cancelled and which was created to supply fake ITC to other entities in the cartel and for mutual benefit.

HELD that the show cause notice and the impugned order suffered from an incurable defect of non-disclosure of the reasons.

Order dated 11.9.2023 in Writ Petition No.2534 of 2023 in Nirakar Ramchandra Pradhan Vs. Union of India and others