GST Registration cannot be cancelled if the SCN not issued in prescribed template

The Madras High Court has ruled that a GST registration cannot be cancelled if the Show Cause Notice (SCN) was not issued in the prescribed format. In this case, the SCN failed to specify the date, time, and venue for a personal hearing, which is a mandatory requirement under Rule 22(1) of the TNGST Rules. Consequently, the court set aside the cancellation order and directed the authorities to issue a fresh SCN in the correct format.

In Suresh Trading Corporation v. The Asst. Commissioner (Circle) of SGST, Tamil Nadu [W.P. No. 21109 of 2021, dated October 01, 2021], Suresh Trading Corporation ("the Petitioner") has filed this petition challenging the order dated October 10, 2019 in which the GST certificate of the Petitioner was cancelled. However, it is to be noted that SCN which preceded the same was not been issued in the prescribed template according to Rule 22(1) of Tamil Nadu Goods and Services Rules 2017 ("TNGST Rules").

Petitioner contended that SCN refers to form GST REG-17 which was issued by the Respondent department regarding the cancellation of GST registration is not in this format/template as it does not mention the date, month, year and time for personal hearing. For this the Petitioner draws the attention to Rule 22(1) of the TNGST Rules which says where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under Section 29 of the Tamil Nadu Goods and Services Tax Act, 2017 ("TNGST Act"), he shall issue a notice to such person in FORM GST REG-17 requiring him to show cause within a period of seven working days from the date of the service of such notice as to why his registration shall not be cancelled.

The Hon’ble Madras High Court after analyzing the facts of the present case set aside the impugned order dated October 10, 2019 for cancellation of GST Registration solely on the ground that SCN which preceded the same has not been issued in the prescribed template i.e., REG- 17 under Rule 22(1) of TNGST Rules as it does not mention the date and time of personal hearing.

Further, the Court directed the respondent authority to issue SCN afresh in prescribed template/format inter- alia setting out the date, time and venue for personal hearing and carry the same to its logical end as expeditiously as possible i.e., as expeditiously as the business of respondent shall permit and in any event, within six weeks from today i.e. on or before November 12, 2021. And there shall be no order as to costs.