The Gujarat High Court in the case of Vageesh Umesh Jaiswal v/s State of Gujarat reprimanded Commercial Tax Officer for issuing vague show-cause notice bereft of any material particulars regarding GST Registration Cancellation.
The writ applicant is a proprietor of a proprietary firm running in the name of M/s. All Metals is engaged in the business of trading aluminum round bars, steel tubes, pipes etc. The proprietary firm is registered under the Gujarat Value Added Tax Act, 2003. On 17th March, 2021, the premises of the writ applicant were searched by the Asst. Commissioner of DGGI (Directorate General of Goods & Services Tax Intelligence), Ahmedabad. In the course of the search, the officer seized various documents like purchase invoices, ledger copies etc. It appears that, thereafter, the respondent issued a show-cause notice in the Form GSTREG-17/31 [Rule 22(1)] of the Rules.
The division bench of Justice J. B. Pardiwala and Justice Nisha M. Thakore noted that the whole object of issuing a show-cause notice is to make the recipient of the notice understand what the authority is trying to convey and what are the nature of the allegations.
The court said that show cause notice has great significance in the adjudication proceedings for the mandatory compliance of the principles of natural justice. Show cause notice is a mandatory requirement for raising any demand under the Act, 2017 except payment of interest u/s 50 and assessment of non filer of returns u/s 62 of the act. The Show Cause Notice is the foundation on which the adjudicating authority has to build up its case.
The court while allowing the writ application quashed and set aside the impugned order canceling the registration.
The court added that it is open to the authority to issue a fresh show-cause notice, if it intends to, but such fresh show-cause notice should contain all the necessary details and information about the alleged bogus billing to enable the assessee to file an effective reply to the same.