Kunhalavi N Vs State Tax Officer
Date: June 9, 2024
Subject Matter
Issuance of a SCN proposing registration cancellation in the incorrect form (Form GST-REG-31 and not in Form GST-REG 17) invalidates the entire proceedings
Summary
The petitioner's registration under the Central Goods and Services Tax Act and the Kerala State Goods and Services Tax Act was cancelled due to non-filing of returns and failure to respond to the show cause notice. The petitioner argued that the show cause notice was not issued in the prescribed manner and was vague. The Court agreed with the petitioner, stating that the show cause notice was not issued in the correct format as per the rules, and the cancellation order did not specify the factors leading to the cancellation. As a result, the cancellation order was set aside. However, it was clarified that setting aside the order does not absolve the petitioner from any fiscal liability, and the petitioner is required to file all defaulted returns and comply with any fiscal obligations within a specified period after the restoration of registration.
The petitioner has approached this Court aggrieved by Ext.P3 order cancelling the registration granted to him under the Central Goods and Services Tax Act/ the Kerala State Goods and Services Tax Act [Hereinafter referred to as the ‘CGST/KSGST Acts] in exercise of jurisdiction under Section 29 of those enactments.
2. The petitioner was a registered dealer on the rolls of the State Tax Officer, Manjeri. Since he did not file the returns for the periods from December 2021 on time, the 1st respondent issued Ext.P2 show cause notice on 07.06.2022 to show cause as to why the registration granted to the petitioner under the Goods and Service Tax Act, 2017 should not be cancelled.
3. The petitioner states that he could not file reply to the Show Cause Notice as he was busy with the treatment of his father. On 13.07.2022, the 1st respondent issued Ext.P3 order of cancellation of registration on the ground that the petitioner has not filed the returns for six consecutive months and has not responded to Ext.P2 notice.
4. The petitioner states that Ext.P2 notice is issued by the 1st respondent in Form GST-REG-31 and as per Rule 22 of the CGST/SGST Rules, the show cause notice ought to have been issued in Form GST-REG 17 and the notice is vague. Against Ext.P3 order, the petitioner filed an appeal under Section 107 of the CGST/KSGST Acts before the 2nd Since there was a delay of 361 days in filing the online appeal, the petitioner apprehends that it would be dismissed by the second respondent.
5. Heard the learned Counsel for the petitioner and the learned Government Pleader.
6. The learned Counsel for the petitioner contends that the entire procedure executed by the respondents to revoke the petitioner’s registration is illegal and unenforceable. He points out that the show cause notice issued prior to cancellation of registration is not in the manner prescribed by the Rules inasmuch as the notice has been issued in Form GST-REG-31 and that the show cause notice should have been issued in Form GST-REG 17. It is pointed out that the show cause notice issued in Form GST-REG-31 is applicable to proceedings leading to the suspension of the registration of the dealer. It is submitted that the officer issued a notice in a form containing vague details of the reasons for cancellation, which is not permissible under law. The learned Counsel also refers to Ext.P5 judgment of this Court where this Court has interfered with the orders of cancellation of registration on identical grounds.
7. It is trite law that if the show cause notice is vague and where the order of cancellation also does not specify the factors that led to the cancellation of registration, the entire proceedings must be held to be bad in law.
8. Further, it is a well settled salutory principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner.
Since the proceedings were initiated by the 1st respondent in Form GST-REG-31 and not in Form GST-REG 17, Ext.P3 order is without jurisdiction. Ext.P3 is accordingly set aside. It is made clear that setting aside Ext.P3 will not have the effect of absolving the petitioner from any fiscal liability. The petitioner will be required to file all defaulted returns together with tax, late fee, interest, penalty etc, within a period of two weeks from the date on which the registration of the petitioner is restored in compliance with this judgment. All other contentions in the writ petition are left open.
The writ petition is disposed of.