SCN should specify claims so that the noticee may respond to the matter at hand: Delhi High Court
SK Enterprises Vs Principal Commissioner of Goods and Services Tax (Delhi High Court)
Facts:
- The petitioner challenges an order dated 19.07.2023 canceling their GST registration effective from 23.05.2022.
- The cancellation is based on Section 29(2)(e) – registration obtained by means of fraud, wilful misstatement, or suppression of facts.
- The show cause notice (SCN) dated 05.07.2023 forms the basis for the cancellation, alleging fraud without specifying details.
- The petitioner is given seven working days to respond to the SCN and directed to appear before the concerned Officer on 06.07.2023.
- The SCN fails to provide specific details of the alleged fraud, misstatement, or suppressed facts.
Observations:
- The court notes that the SCN lacks clarity as it doesn’t specify the alleged fraud, misstatement, or suppressed facts, violating the standard for a meaningful response.
- The impugned order doesn’t provide any reasoning; it merely references the SCN.
- The cancellation is retrospective from 23.05.2023, but neither the SCN nor the order gives reasons for this retrospective effect.
Conclusion:
- The court allows the petition, setting aside both the SCN and the impugned order.
- The respondent is directed to immediately restore the petitioner’s GST registration.
- The order doesn’t prevent the respondent from taking action if the petitioner is found non-compliant or violating any laws.
- The petition is disposed of in favor of the petitioner.
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