2026-VIL-1114-GUJ
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SGST High Court Cases

GST - Rejection of application for revocation of cancellation of registration - Direction to pay tax, interest and penalty through Form GST DRC-03 - Application for revocation was rejected on the ground that the Petitioners had purchased goods from three dealers who had suo motu cancelled their registration - Petitioners were asked to pay tax, interest and penalty through Form GST DRC-03, without any show cause notice on such purchases - HELD - No show cause notice was issued on the purchases from the three dealers. The order did not reflect when those dealers sought cancellation, whether at the time of issuance of registration to the Petitioners or thereafter, which required examination after hearing - Proceedings for revocation of cancellation fall in a different domain and cannot be interjected with proceedings under Sections 73 and 74 of the GST Act dealing with fraudulent availment of input tax credit and suppression of facts - The Petitioners cannot be asked to deposit tax and penalty through Form GST DRC-03, which is voluntary, without a show cause notice for disallowing input tax credit, and the order suffers from non-application of mind - The entire action amalgamated different statutory provisions governing cancellation of registration and disallowing input tax credit, and simultaneously cancelled the registration retrospectively, resulting in closure of business - The order rejecting the revocation application is quashed and set aside – The petition is disposed of - GST - Cancellation of registration - Violation of principles of natural justice - SCN proposed cancellation on the ground that registration was obtained by fraud, wilful misstatement or suppression of facts - Petitioners sought 15 to 20 days to produce documentary evidence on input tax credit, but the registration was cancelled retrospectively within 12 days of the notice - HELD - The cancellation order neither dealt with the request made by the Petitioners nor took any decision to extend time or give an opportunity to produce documentary evidence, and was passed bereft of the evidence which the Petitioners sought to produce - The appellate authority tried to improve upon the original defect. The appellate authority could not have considered the facts beyond the scope of the original show cause notice - The show cause notice and the appellate order are quashed and set aside, liberty is reserved to the Respondent to initiate fresh proceedings by an appropriate notice.
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