The Delhi High Court has held that the principles of natural justice require the authorities to give opportunity to the person of hearing before passing an order.
The court observed that the absence of an opportunity amounts to the proceedings being “defective.” Further, it relied on the circular Issued by the Ministry of Finance Department, Central Board of Excise and Customs, which required at least three opportunities for a personal hearing to be given to the noticee within a sufficient interval of time.
Setting aside the show-cause notice on the ground that the effective right of being heard has been denied to the petitioner. The court found the order canceling the GST registration with retrospective effect to be “bereft of any reason,” on the grounds of non-mentioning the reasons for cancelling the GST registration nor giving any clue as to why it was cancelled further adding that there has been an abject failure on the part of the concerned authorities to assign even rudimentary reasons for retrospective cancellation.
Further observing that the proceedings under demand and recovery certificate for the non-payment of penalty of ₹ 24,38,232/- are independent of the proceedings for cancellation of GST registration and cannot be a ground for cancellation of GST registration or even for rejecting the application for revocation of cancellation of registration. “Clarifying that the respondents are not precluded from taking any steps for the recovery of tax or penalty or initiating fresh action or continuing other proceedings,” said Delhi High Court order.
The judgment was pronounced by the bench of Justice Ravinder Dudeja and Yashwant Varma.
Source #ET