SCN issued without reasons/allegations violates the Principles of Natural Justice

Last updated: 10 February 2023

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The Delhi High Court has ruled that a Show Cause Notice (SCN) for cancelling GST registration must clearly state the allegations against the assessee. The court found that issuing an SCN with only a vague reason like "others" violates the principles of natural justice. Such notices fail to inform the assessee of the case they need to answer, preventing a proper response and invalidating any subsequent order.

Court :
Delhi High Court

Brief :
The Hon'ble Delhi High Court in Surender Kumar Jain v. Principal Commissioner &Anr. [W.P.(C) 17700/2022 dated January 25, 2023]set asidethe Show Cause Notice ("SCN") and consequential order cancelling the GST registration of the assessee. Held that, a SCN must clearly state the allegations that the concerned noticee has to meet, being the essence of a SCN, any notice that does not qualify this criterion, cannot be considered as a SCN, which are not meant to be issued mechanically to comply with a formality, but to serve the principles of natural justice and to enable the concerned authority to take an informed decision. Further held that, the entire purpose of the SCN is to enable the noticee to respond to the allegations on the basis of which an action is proposed.

Citation :
W.P.(C) 17700/2022 dated January 25, 2023

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