In Writ Petition (L) No.36594 of 2022 -BOM HC- Bombay High Court sets aside GST registration cancellation of Mayel Steels Pvt. Ltd., says ‘classic case’ of arbitrary actions by CGST & C.EX. Superintendent
Justice G.S. Kulkarni & Justice Jitendra Jain [19-06-2023]

Read Order: Mayel Steels Pvt. Ltd v. Union of India

Chahat Varma

New Delhi, July 10, 2023: The Bombay High Court has set aside the cancellation of GST registration of Mayel Steels Pvt. Ltd. (petitioner), stating that the Superintendent, CGST & C.EX., had acted arbitrarily and in violation of the principles of natural justice.

The dispute arose when a show cause notice was issued to the petitioner on August 1, 2022, with a peculiar requirement for the petitioner to appear the next day at 2:01 p.m. The notice was uploaded on the WebPortal without any additional communication. The petitioner, upon becoming aware of the notice, submitted a reply on August 8, 2022, which was received by the authority on August 9, 2022. Meanwhile, the Joint Commissioner of State Tax (GST) had ordered the provisional attachment of the petitioner's bank account/property under Section 83 of the Central Goods and Services Tax Act (CGST Act).

Thereafter, the petitioner had approached the Bombay High Court, challenging the arbitrary actions of the Superintendent, CGST & C.EX., but despite being notified of the court petition, the Superintendent proceeded to cancel the petitioner's GST registration.

The division bench found it perplexing that such a short notice was issued to the petitioner, requiring their presence at an unusual time of 2:01 p.m. The bench also noted that the order of cancellation included issues that were not part of the show cause notice.

“In these circumstances, there can be no alternative but to set aside not only the show cause notice but the impugned order dated 2nd January 2023 cancelling the Petitioner's registration,” said the division bench.

In conclusion, the bench emphasized that when taking actions related to the registration of dealers, proper communication channels must be followed. Simply uploading the show cause notice on the Web-portal was not sufficient. The bench ruled that notices should be sent to dealers through email and/or hand delivery to ensure effective communication.