Lack of specific allegations in the SCN rendered it meaningless and deficient in meeting the requisite legal standards

Facts of the Case:  The petitioner challenged the show cause notice (SCN) dated 04.07.2024, issued by the proper officer proposing the cancellation of the petitioner's GST registration. The primary reason for the proposed cancellation cited in the SCN was that the petitioner allegedly issued invoices or bills without supplying goods or services, which violates the provisions of the GST Act and Rules. 

The petitioner argued that the SCN was vague and lacked specific details regarding the alleged violation. The SCN did not specify which invoice or bill was issued without corresponding supply, nor did it include any supporting documents. The petitioner also pointed out that the SCN did not include the name and designation of the issuing officer, adding to its ambiguity. Despite submitting a reply to the SCN on 05.07.2024, no further decision was made, and the petitioner's GST registration remained suspended.

Held that:  The court observed that the SCN was indeed cryptic, merely reproducing Rule 21(b) of the CGST Rules without providing specific details or evidence of the alleged non-compliance. The SCN failed to fulfill its primary purpose, which is to inform the noticee of the specific allegations, enabling them to respond effectively. The court noted that the lack of specific allegations in the SCN rendered it meaningless and deficient in meeting the requisite legal standards for a show cause notice.

The SCN found to be invalid due to its lack of specificity and failure to adhere to the principles of natural justice. Consequently, the court allowed the petition, setting aside the impugned SCN and directing the respondents to restore the petitioner's GST registration immediately. The court clarified that this order does not preclude the proper officer from initiating fresh proceedings, if necessary, in accordance with the law.

The court ruled in favor of the petitioner, quashing the SCN due to its vagueness and failure to provide sufficient details or evidence of the alleged violation. The petitioner's GST registration was ordered to be restored, although the possibility of future proceedings was left open, provided they adhere to proper legal standards.

To read the complete judgment 2024 Taxo.online 1790