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Reasons For Registration Cancellation Must Be Clearly Indicated In The Show Cause Notice.

In the case of M/S Frequent Logistics Services Pvt. Ltd. v. Commissioner Goods and Service Tax Department & Ors. [Writ Petition (C) 11311 of 2023 and CM Nos. 43972 of 2023, 43973 of 2023 & 43974 of 20231, a show-cause notice for the cancellation of the GST was sent to the Petitioner for the grounds that “In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts. “The cancellation of the registration as of the show-cause notice date was also mentioned. The Petitioner was obligated to appear before the appropriate officer three days after receiving the show cause notice. However, the Petitioner was unable to present, so an ex-parte, suo-moto ruling was granted, terminating the Petitioner’s GST registration with a retroactive effect. The Petitioner filed an appeal before the Appellate Authority, however, the appeal was dismissed.

Aggrieved by the decision of the Appellate Authority, the Petitioner approached Delhi High Court.

The Delhi High Court observed that the cancellation was carried out only because the company was not discovered to be operating from its primary place of business. However, the application for a change in the primary place of business had already received approval from the relevant government, and the petitioner had already received a certificate of revised GST registration. Instead of the new location, the old location had been used for the inspection.

The Court held that the Order “does not reflect any intelligible reason” for the revocation of the GST registration. Furthermore, It was decided that the show cause notice lacked any justification for retroactively revoking the Petitioner’s GST registration.

Further, “It is also not clear whether the petitioner’s registration was cancelled on account of fraud, willful misstatement or suppression of facts, since all the three reasons were mentioned.”

Thus, the Delhi High Court allowed the petition.

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