Background

The company, incorporated in February 2022, obtained its GST registration in March 2022. They held a valid license and were engaged in the purchase and sale of scrap material. However, in February 2024, they received a show cause notice alleging violations of specific GST rules.

The Dispute

• The company contested the notice. They argued that they were a legitimate business operating from a registered address. They also requested a proper investigation to verify their claims.
• Despite their response, the authorities cancelled the company's GST registration in March 2024, with a retrospective effect to February 2024. The company then appealed this decision, but the appeal was dismissed due to a technicality.

Taking Legal Action

The company then filed a writ petition challenging both the cancellation order and the dismissal of the appeal. They argued that:

• The show cause notice lacked details and failed to mention any inspection or its findings.
• The cancellation order provided no reasons and didn't consider the company's reply.
• The appellate authority dismissed the appeal on a technical ground without examining the validity of the cancellation itself.

Court's Decision

The court agreed with the company's arguments. It emphasized that cancellation of registration has serious consequences and requires valid justifications. The court found that the authorities' orders lacked proper reasoning and due process.

Outcome

The court quashed both the cancellation order and the dismissal of the appeal. The authorities were directed to reissue a proper notice, considering the company's response and conducting a fair hearing before making any decisions.

Case Law-Siddha Mahajan Private Limited VersusState Of U.P. 

Citation-2024 TAXONATION 1323 (ALLAHABAD)

CLICK HERE TO READ FULL CASE LAW 

OR 

SUBSCRIBE GST E-LIBRARY (INDIA'S HIGHEST GST CASE LAW DATA)

FOR MORE UPDATE ON GST/ IT JOIN OUR FREE WHATSAPP GROUP BY CLICKING ON THIS LINK https://chat.whatsapp.com/ILCu7dfsrD07gj5RddywZd