No Provision In The Act Requiring Taxpayer To Seek A NOC For Moving An Application For Revocation Of Cancellation Of Registration

Facts of the Case: –

• The petitioner was registered under the Central Goods and Services Tax Act, 2017 effective from 17.12.2021. That on 27.05.2022, the petitioner applied to the concerned authorities for amendment of certain particulars, which were accepted.
• Thereafter, on 22.09.2022, the respondent issued a show cause notice proposing to cancel the petitioner’s registration, whereby the petitioner was called upon to submit a reply and also appear before the concerned authority on 26.09.2022.
• Pursuant to which, by an order dated 11.10.2022, the registration of the petitioner was cancelled.
• Aggrieved by the said order, the petitioner filed an application seeking revocation of the order of cancellation and the same is pending. The petitioner has been pursuing the concerned authority for disposal of its application for revocation of the cancellation order dated 11.10.2022, but in vain.
• On the behalf of the petitioner, a copy of message apparently received from the officers of Rohini Division was placed on record, which stated that ‘the cancellation of registration has been directed by Anti-Evasion Head-quarter. A proper NOC (No Objection Certificate) from Anti-Evasion Head-Quarter may be obtain in order to enable this office to proceed for the with your revocation application.’

Held: –

• The Hon’ble Court after considering the submissions made and facts of the case, found that reading of show cause notice indicates that the reasons for proposed action was stated as ‘Non-compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed.’
• The Hon’ble Court was unable to understand as to how any person could respond to the said allegation. Clearly, the show cause notice does not specify any allegation, which is capable of being responded to. Further, it is settled law that the purpose of the show cause notice is to enable the noticee to meet the allegations on the basis of which an adverse action is proposed. Thus, it is clear that the impugned show cause notice is bereft of any reasons and is issued in a mechanical manner without any application of mind.
• It was found by the Hon’ble Court that the impugned show cause notice cannot be considered as a show cause notice at all.
• Thereafter referring to the message received by the Officer of the department, placed on record by the petitioner, it was found that admittedly, there is no statutory provision that requires a taxpayer to seek NOC from any authority for moving an application for revocation of Cancellation of registration.
• Lastly, it was found by the Hon’ble Court that the procedure adopted by the respondents for cancellation of the registration is flawed. Further, as already noted above, the impugned show cause notice cannot be considered as a show cause notice at all and therefore, the impugned order dated 11.10.2022, cancelling the petitioner’s registration, has been passed in violation of principles of natural justice and is liable to be set aside.

The Hon’ble High Court with the above findings, set aside the impugned show cause notice dated 22.09.2022 as well as the impugned order dated 11.10.2022, cancelling the registration of the petitioner.  Further, it was clarified that this would not preclude the respondents from initiating any fresh action in accordance with law.

To read the complete judgment 2023 Taxo.online 199