2026-VIL-307-GSTAT-LCK
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SGST Tribunal

GST - Validity of cancellation of registration where Show Cause Notice rests on oral intimation and does not disclose supplier details or grounds - Appellant's registration was cancelled on the allegation of wrongful availment of Input Tax Credit (ITC) in violation of Section 16(2) of the CGST Act, 2017 and the First Appellate Authority (FAA) confirmed the cancellation by invoking Section 29 of the Act - SCN alleged that the Appellant was claiming ITC in violation of Section 16(2), referred to an intimation notice under Section 74A and to an oral communication by an officer, and directed the Appellant to explain why registration should not be cancelled - Whether the cancellation of registration is sustainable when the SCN does not specify the suppliers, the GSTIN, the period or the particulars of inadmissible ITC, and does not refer to Section 29 - HELD - The SCN issued by the adjudicating authority must contain all details necessary under law, and an SCN which does not specify the grounds or sufficient factual particulars violates natural justice - The requirements necessary to sustain the validity of a notice or order must be contained therein, and any deficiency in the SCN cannot subsequently be cured. The SCN did not disclose who the supplier was, what the GSTIN was or in which period inadmissible ITC was claimed. The recommendation for cancellation was based merely on an oral intimation, and no other formal communication was made to the Proper Officer for initiating cancellation proceedings - A mere reference to an oral intimation allegedly given by an officer cannot by itself constitute a valid and sufficient ground for cancellation in the absence of specific allegations supported by the relevant statutory provisions. Proceedings for cancellation of registration and proceedings under Section 74A are distinct and materially different in nature, scope and legal consequences, and the cancellation had to be examined strictly within its own scope, without any finding on the Section 74A proceedings - Section 29 read with Rule 22 provides the framework for cancellation, but neither the SCN nor the cancellation order referred to it, and its invocation by the FAA cannot cure the fundamental defects as the taxpayer must be afforded a fair and effective opportunity to meet the allegations - The cancellation order and the Order-in-Appeal suffer from legal infirmities. The cancellation is revoked and the registration stands restored - The appeal is allowed - GST - Powers of FAA to rely on material not mentioned in the SCN while confirming cancellation of registration - The FAA confirmed the cancellation of registration on the basis of an enquiry report and details of the Form DRC-01A, which were not mentioned in the SCN issued for cancellation, after seeking clarification from the Proper Registering Authority - Whether the FAA can confirm the cancellation on the basis of evidence not produced at the time of passing the cancellation order and without giving the Appellant an opportunity of rebuttal - HELD - The FAA went beyond the SCN and acted as if collecting evidence at the appellate stage. Additional evidence can be produced only in rare circumstances, and where the authority wants additional evidence, a proper opportunity of rebuttal must be given to the Appellant. The order of the FAA did not mention any effective and reasonable opportunity of rebuttal and hearing. Under Rule 112, additional evidence is admissible only in the circumstances specified therein. The Appellate Authority must record specific reasons for admitting or rejecting such evidence, and a personal hearing must be provided in case of rejection. Before admitting such evidence, reasonable opportunity must be given to the adjudicating authority to examine and rebut it. Appellate proceedings should not, as a matter of ordinary practice, be converted into a fresh investigation merely to remedy deficiencies in the original adjudication - The Order-in-Appeal confirming the cancellation on the basis of an enquiry report not mentioned in the SCN is not sustainable in law. The appeal is allowed
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