Case Note & Summary
The petitioner, M/s. Dipak Metal Industries (Prop. Rahul Raj), challenged an order dated 22 July 2024 passed by the Revisional Authority under Section 108 of the CGST/MGST Act, 2017. The Revisional Authority had revised an earlier cancellation order dated 22 June 2022 and retrospectively cancelled the petitioner's GST registration from 12 August 2017, the date of initial registration. The petitioner contended that the show cause notice issued prior to the revisional order did not propose any retrospective cancellation, and thus the order violated principles of natural justice. The court noted that normally it does not entertain petitions when an alternative remedy is available, but in this case, the appeal lay to the Tribunal which was yet to be constituted, and the petition alleged a gross violation of natural justice. The court examined the show cause notice and found that it did not indicate any proposal to cancel the registration retrospectively. Consequently, the petitioner was not put on notice and had no opportunity to make submissions against retrospective cancellation. The court held that the impugned order was unsustainable and set it aside. The matter was remitted to the Revisional Authority for fresh consideration, with a direction to issue a fresh show cause notice specifically proposing any retrospective cancellation and to provide a reasonable opportunity of hearing to the petitioner. The petition was allowed in these terms.
Headnote
A) Constitutional Law - Natural Justice - Show Cause Notice - The Revisional Authority under Section 108 of the CGST/MGST Act, 2017 cannot impose a penalty or cancellation with retrospective effect without specifically proposing such action in the show cause notice, as it violates principles of natural justice. The petitioner was not put on notice that the cancellation could be retrospective, and thus was denied an opportunity to make submissions on that aspect. (Paras 5-7) B) Goods and Services Tax - Retrospective Cancellation of Registration - Section 108 CGST/MGST Act, 2017 - The order dated 22 July 2024 revising the cancellation of GST registration retrospectively from 12 August 2017 was quashed because the show cause notice did not indicate any proposal for retrospective cancellation. The court held that such an order without prior notice is unsustainable. (Paras 5-7) C) Civil Procedure - Alternative Remedy - Writ Jurisdiction - The court entertained the petition despite availability of alternative remedy because the Tribunal was not yet constituted and the petition involved a gross violation of natural justice. (Para 4)
Issue of Consideration
Whether the Revisional Authority under Section 108 of the CGST/MGST Act, 2017 could retrospectively cancel the petitioner's GST registration from the date of initial registration without providing an opportunity to be heard on the proposed retrospective effect.
Final Decision
The impugned order dated 22 July 2024 is quashed and set aside. The matter is remitted to the Revisional Authority for fresh consideration. The Revisional Authority shall issue a fresh show cause notice specifically proposing any retrospective cancellation and provide a reasonable opportunity of hearing to the petitioner. The petition is allowed in these terms.
Law Points
- Natural justice
- Retrospective cancellation of GST registration
- Show cause notice must specify proposed action
- Alternative remedy not a bar when Tribunal not constituted
- Section 108 CGST/MGST Act 2017
