Cancellation of GST registration order quashed due to order issued in GST REG-31 instead of GST REG-17.

A recent court case where a petitioner challenged the cancellation of their Goods and Services Tax (GST) registration.

Background:

The petitioner, a registered dealer under the CGST/KSGST Acts, faced cancellation of their registration for failing to file returns for six consecutive months (from December 2021 onwards). The authorities issued a show cause notice (Ext.P2) before proceeding with the cancellation (Ext.P3).

Petitioner's Contentions:

• The petitioner argued that the show cause notice (Form GST-REG-31) was issued in the wrong format. As per rules, it should have been issued in Form GST-REG-17 for cancellation proceedings.
• The notice lacked specific details regarding the reasons for cancellation, making it vague.
• The petitioner cited a previous court judgment (Ext.P5) where a similar procedural error led to the cancellation being quashed.

Court's Observations:

• The court acknowledged the principle that statutory procedures must be followed meticulously. Since the wrong form (GST-REG-31) was used for the show cause notice, the cancellation order (Ext.P3) was deemed without jurisdiction.

Court's Order:

• The court set aside the cancellation order (Ext.P3). This, however, doesn't absolve the petitioner from their tax liabilities.
• The petitioner must file all defaulted returns along with taxes, penalties, and interest within two weeks of registration restoration.
• The court left other contentions raised in the petition undecided.

CASE LAW- Kunhalavi Versus The State Tax Officer

Citation-2024 TAXONATION 1350 (KERALA)

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