2026-VIL-185-GSTAT-LCK
  1. Home
  2. 2026-VIL-185-GSTAT-LCK

SGST Tribunal

GST - Cancellation of registration - Jurisdiction of FAA to impose a condition of cash deposit of disputed ITC and an automatic-void clause while restoring registration - Appellant's registration was cancelled pursuant to a show cause notice issued under Rule 21(a) for non-existence at the declared place of business - FAA set aside the cancellation and directed restoration of registration subject to deposit of the disputed ITC in cash within seven days, failing which the order was to become void - Appellant contended that the Appellate Authority travelled beyond its statutory jurisdiction - Whether the FAA had jurisdiction under Section 107 to impose such a condition - HELD - The SCN was issued for cancellation of registration for non-existence on verification and not for wrong availment of ITC. The FAA has jurisdiction to modify, annul and confirm the impugned order but cannot travel beyond it without following the procedure established by law - The determination of ITC entitlement is a distinct and substantive adjudicatory proceeding governed by Sections 73 and 74, which contemplate issuance of notice in Form DRC-01, adjudication by the proper officer and a meaningful opportunity to the taxpayer to contest the allegations. None of these safeguards were followed - The finding directing reversal of ITC could not have been rendered in proceedings concerning cancellation of registration. The provisos to Section 107(11) bar an order requiring the appellant to pay tax or ITC wrongly availed unless a notice to show cause is given and the order is passed within the time limit specified under Section 73 or 74. An admission must be conclusive in nature, and a conditional admission or simple averment in an affidavit cannot substitute the law without proper examination. The order must be justified within the four corners of the Act - The direction to deposit the amount within seven days is not sustainable in law - The appeal is allowed - Imposition of cash deposit or ITC demand by First Appellate Authority without notice - Principles of natural justice - Audi alteram partem - Appellant contended that the question of cash deposit was never put to it and no opportunity was afforded to address the quantum, mode or feasibility of payment - Whether the impugned condition violates the principles of natural justice - HELD - Though the Appellant submitted an affidavit for repayment of wrongly availed ITC, that is another issue to be determined by the proper officer by issuing a separate show cause notice with proper investigation and detailed inquiry. The FAA should not impose a condition which was not in the show cause notice or the order in original unless the appellant is given notice to show cause against the proposed amount. The impugned order does not show that any notice was given before imposing the condition of cash or tax. An effective and meaningful opportunity must be given before imposing any tax or penalty, and imposing tax without affording opportunity is a clear violation of the principles of natural justice. If there is wrong availment of ITC, interest and penalty would also follow under law - The ITC demand is void and violative of the provisions of the GST Act and the principles of natural justice - Cancellation of registration - Section 75(7) of CGST Act, 2017 - Order passed on a ground different from the show cause notice - Show cause notice was issued for cancellation of registration on the ground of non-existence of the registered firm at the place of business - Proper Officer passed the order in original on the ground that ITC was wrongly availed from four suppliers whose registrations had been cancelled, and cancelled the registration with retrospective effect - Whether the order of the Adjudicating Authority is sustainable on the grounds of the show cause notice - HELD - Under Section 75(7), no demand shall be confirmed on grounds other than the grounds specified in the notice. The Proper Officer neither raised any demand in the show cause notice nor discussed any allegation regarding wrongful availment of ITC, but proceeded to pass the order on an entirely new and different ground. The ground of no place of work in the show cause notice and the ground of wrong availment of ITC in the order are apparently different and contradictory, and are not cohesive to each other, since if ITC was wrongly availed it cannot be said that there was no place of work. An order passed beyond the scope and allegations contained in the show cause notice is legally unsustainable and bad in law - The orders of the First Appellate Authority and the Adjudicating Authority are null and void, the appeal is allowed and the cancellation of registration is revoked, with liberty to the Respondent to initiate proceedings de novo to protect the revenue.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?