Facts of the Case: The petitioner’s business premises were subjected to an inquiry on 05.09.2024. Pursuant thereto, a show cause notice dated 14.09.2024 was issued proposing cancellation of GST registration. The petitioner replied; however, vide order dated 26.09.2024, the registration was cancelled.
The petitioner’s application for revocation of cancellation was rejected on 31.12.2024.
Against this, the petitioner preferred an appeal before the Appellate Authority, which vide order dated 28.03.2025 held the show cause notice and cancellation order to be cryptic and without reasons, thus quashing them. However, while allowing the appeal, the Appellate Authority directed the jurisdictional Deputy Commissioner to verify facts afresh before revoking registration. Acting on this, the adjudicating authority issued further communication dated 01.05.2025, informing the petitioner that cancellation could not be revoked without fulfilling conditions laid down in the appellate order.
Aggrieved, the petitioner filed the present writ petition before the Allahabad High Court.
Issue: Whether the Appellate Authority, after quashing the show cause notice and cancellation order for being cryptic and without reasons, could remand the matter to the adjudicating authority for verification of facts, thereby granting a “second innings” to the Revenue under Section 107(11) of the CGST/UPGST Act, 2017?
Held that:
The High Court noted that the Appellate Authority itself had found the SCN and cancellation order cryptic and unsustainable. Once such a finding was recorded, there was no justification for remanding the matter or issuing fresh directions for verification.
Under Section 107(11) of the GST Act, the Appellate Authority may confirm, modify, or annul the order under appeal after such further inquiry as necessary. However, the provision expressly prohibits remanding the case back to the adjudicating authority.
By directing verification of facts and conditional revocation, the Appellate Authority had in effect given a second innings to the Revenue, which is impermissible.
Accordingly, the Court set aside the appellate order dated 28.03.2025 to the extent it remanded the matter, and also quashed the consequential order dated 01.05.2025.
The writ petition was allowed. The appellate order was modified by setting aside the remand portion. Revenue authorities are at liberty to take fresh action as per law.
Case Name: M/s KANHA SHREE STEELS v. ASSISTANT DEPUTY COMMISSIONER CGST DIVISION-VI, GHAZIABAD & ORS. dated 19.08.2025
To read the complete judgment 2025 Taxo.online 1935
