M/S CUTHBERT OCEANS LLP v. THE SUPERINTENDENT OF CGST RANGE 109 DIVISION ROHINI

1. Issue notice.

2. Mr. Harpreet Singh, learned counsel appearing for the respondent accepts notice.

3. The petitioner has filed the present petition, inter alia, impugning the show-cause notice dated 09.05.2023 (hereafter ‘the impugned show-cause notice’) calling upon the petitioner to show cause as to why its registration should not be cancelled, as well as the order dated 29.05.2023 (hereafter ‘the impugned order’) passed pursuant to the impugned show-cause notice.

4. The respondent issued the impugned show-cause notice proposing to cancel the petitioner’s registration for the following RAWAL reasons: “Section 29(2)(e)-registration obtained by means of fraud, willful misstatement or suppression of facts”

5. Apart from the aforesaid reason, the impugned show-cause notice did not disclose any other reason or particulars for proposing the adverse action against the petitioner. The petitioner was called upon to furnish a reply to the impugned show-cause within a period of seven days from the date of service of the impugned show-cause notice; it further directed the petitioner to appear before the respondent on 11.05.2023 at 01:00 PM.

6. The petitioner filed a response to the said show-cause notice albeit belatedly – after the respondent had passed the impugned order cancelling the petitioner’s GST registration.

7. As is apparent from the above, the impugned show-cause notice was bereft of any particulars and it is difficult to accept that the said show-cause notice could elicit any meaningful response. It is trite law that a show-cause notice must set out the allegation in order to enable the noticee to respond to the same. Merely making the bald statement that the registration was obtained by fraud, willful misstatement or suppression of facts without alluding to any such misstatement or the allegedly suppressed facts, provides no clue to the noticee as to the allegation against him.

8. The petitioner’s response to the impugned show-cause notice (although sent belatedly) indicates that the petitioner has referred to the transactions carried out by him and had quizzed the respondent; “So RAWAL what is fraud in this transaction?”. This question resonates with us as well.

9. Clearly, the impugned show-cause notice cannot be sustained and is liable to be set aside.

10. The impugned order cancelling the petitioner’s registration is equally cryptic. The said order is set out below: - “Form GST REG-19 [See Rule 22(3)] Reference Number: ZA070523228704L Date 29/05/2023 To CUTHBERT OCEANS LLP Unit No 111, Aggarwal City Square, District Centre Manglam Place, New Delhi, North West Delhi, Delhi, 110085 GSTIN/UIN: 07AAPFC1389P1ZO Application Reference Number (ARN): AA070523029624B Order for Cancellation of Registration This has reference to show cause notice issued dated 09/05/2023. The effective date of cancellation of your registration is 07/02/2020

3. It may be noted that a registered person furnishing return under subsection (1) of section 39 of the CGST, 2017 is require to furnish a final return in FORM GSTR-10 within three months of the date of this order.

4. You are required to furnish all your pending returns.

5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period to the date of cancellation whether or not such tax and other dues are determined before or after the date of cancellation. Place: RANGE – 109 Date: 29/05/2023”

11. Mr. Harpreet Singh, learned counsel appearing for the respondent is also unable to shed any light on the reasons why the petitioner’s registration was cancelled, and that too retrospectively. The impugned order is not informed by reason.

12. Although the impugned order is an appealable order, but considering that this is a clear case of violation of the principles of natural justice, we have considered it apposite to entertain the present petition.