The Kerala High Court in the case of SURESH METHANAPARAMBIL KUTTAN v. THE SUPERINTENDENT, GOODS & SERVICES TAX DEPARTMENT & ORS. Vide WP(C) No. 24133 of 2023 dated 12.06.2025, has held that Show cause notice must clearly state the grounds for cancellation and comply with the statutory reply period. Cancellation order passed in violation of Rule 22(1) of CGST Rules, without specific reasons and before expiry of the 7-day reply period, is invalid and liable to be set aside.

Facts of the Case: In this case, the petitioner challenged an order passed by the 1st respondent, cancelling the petitioner’s GST registration under the CGST Act, 2017. The cancellation was based on a report submitted by the Enforcement Officer, claiming that the petitioner was not operating from the registered place of business, thereby allegedly violating the provisions of the Act.

Pursuant to this, a show cause notice was issued, followed shortly by the impugned cancellation order.

The petitioner argued that SCN was not a valid notice under Rule 22 of the CGST Rules, 2017, as it did not specify any clear reason or statutory violation for cancellation; and the order was passed before the expiry of 7 working days, the statutory period allowed to respond to the show cause notice.

Issue: Whether the cancellation of GST registration vide impugned order is valid in law when the show cause notice was vague and the reply period under Rule 22 of the CGST Rules, 2017 was not honoured.

Held that: The High Court held in favour of the petitioner and made the following observations:

• Rule 22(1) of the CGST Rules mandates that a proper officer shall issue a show cause notice in FORM GST REG-17, stating the reasons for cancellation, and give the taxpayer seven working days to respond.
• However, the SCN in this case do not specify the exact grounds or statutory provisions allegedly violated.
• Further, Though seven working days were mentioned, the cancellation order was passed before expiry of the said period — a clear breach of the statutory time frame.
• The show cause notice merely stated “Non compliance of any specific provisions in the GST Act or the Rules made thereunder as may be prescribed.” This vague language, without identifying the actual provisions violated, rendered the notice legally unsustainable.

The Court found merit in the petitioner’s arguments and held that SCN was not a valid show cause notice under Rule 22. Therefore, cancellation order is set aside. However, the Court granted liberty to the Department to initiate fresh cancellation proceedings, if warranted, after issuing a proper show cause notice, clearly mentioning the grounds and providing the full statutory reply period.

To read the complete judgment 2025 Taxo.online 1216