Cancellation of GST Registration without stating a reason in SCN/Order is cryptic in nature

Last updated: 22 February 2023

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Quick Summary

The Gujarat High Court has ruled that cancelling a GST registration without providing clear reasons in the Show Cause Notice (SCN) or the final order is unlawful. The court found such orders to be "cryptic" and in violation of natural justice principles. Consequently, the court set aside the cancellation of Gigamade Machineries Private Limited's GST registration and allowed the authorities to issue a fresh notice if necessary.

Court :
Gujarat High Court

Brief :
The Hon'ble Gujarat High Court in Gigamade Machineries Private Limited v. State of Gujarat [R/Special Civil Application No. 17599 of 2022 dated February 10, 2023] quashed and set aside the Show Cause Notice ("SCN") and consequential order cancelling the GST Registration of the assessee, on the grounds of being violative of principles of natural justice, as the reasons for cancellation of GST Registration were not stated. Held that, the order is not only non-speaking but also cryptic in nature, which entails penal and pecuniary consequences and the Revenue Department ought to have referred to the contents of the SCN and have followed the principles of natural justice.

Citation :
R/Special Civil Application No. 17599 of 2022 dated February 10, 2023

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