SCNs must contain detailed and specific information justifying the Department's actions, especially when revisiting previous decisions

Facts of the case: In this case, Writ Petition was filed to challenge impugned order passed after the cancellation of the petitioner's registration. The Petitioner argued that they were not aware of the show cause notice as it was affixed on the walls of the closed industry and claimed no email communication was acknowledged since the industry had ceased operations. Cancellation order indicated no amount payable under various tax heads. Further, it was claimed that the Department issued SCN without following principles of natural justice as there was no mention of any new material or dates that justified a change in the Department's decision after the cancellation of registration. On the other hand, the respondent contended that Section 29(3) of the GST Act allows the Department to revisit and revise its decision regarding registration cancellation. Also, Section 169 of the GST Act validates communication through email, and thus, the Department maintained that the show cause notice was validly communicated.  

Held that: The Telangana High Court in this case, has held that the Show cause notices must contain detailed and specific information justifying the Department's actions, especially when revisiting previous decisions. The absence of these details rendered the show cause notice defective, as it did not provide a sufficient foundation for the impugned action. Petitioner must be given a fair opportunity to respond to any new material or reasons that arise post initial decision. Also, simply sending an email notification was insufficient to address the lack of necessary details in the show cause notice – Provisions of the GST Act related to communication and revision of decisions must be strictly followed to ensure due process.  

To read the complete judgment 2024 taxo.online 1478