GST Update

 Desk of CA. Praveen Sharma – 1052 Series (CAPS) 

 Karnataka High Court IN THE CASE OF M/s Swastik Enterprises v. Assistant Commissioner of Commercial Taxes & Others

Karnataka High Court Restores GST Registration After Violation of Natural Justice

In an important judgment, the Karnataka High Court restored a taxpayer's GST registration after finding that the cancellation process violated the principles of natural justice.

The GST department had cancelled the taxpayer's registration without providing an effective opportunity to respond to the Show Cause Notice (SCN). The taxpayer challenged both the cancellation order and the rejection of the revocation application before the High Court.

The Court observed that GST registration is vital for carrying on business and cannot be cancelled without following the due process of law. It held that the taxpayer must be given a fair opportunity to present its case before any adverse action is taken.

Accordingly, the High Court set aside the cancellation order as well as the order rejecting the revocation application. The matter was restored to the SCN stage, allowing the taxpayer to file a detailed reply. The Court also directed the GST authorities to restore the registration immediately and pass a fresh, reasoned order after considering the taxpayer's response.

The ruling reinforces that GST authorities must follow the principles of natural justice and cannot cancel registrations through a mechanical process. It also provides relief to taxpayers whose registrations have been cancelled without a proper opportunity of hearing.

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Regards
CAPS