Facts of the Case

The petitioner, M/s. Western Offshore & Marine Projects Pvt. Ltd., approached the Kerala High Court challenging Ext.P4, an order issued by the first respondent cancelling the GST registration granted to the petitioner under the CGST/SGST enactments.

The petitioner contended that Section 29 read with Rule 22 of the CGST/SGST Rules required issuance of a show cause notice before an order cancelling registration could be passed. According to the petitioner, the prescribed show cause notice was required to be issued in Form GST REG-17 before cancellation.

The petitioner’s specific case was that no such notice in Form GST REG-17 had been issued. It maintained that the only notice issued was one concerning suspension of registration in Form GST REG-31. The judgment records this precise challenge while examining the legality of the cancellation order.

The case record also reflects that the petitioner had placed several documents on record, including its GST registration certificate, GSTR-3B returns, the cancellation order, online appeal, appellate proceedings, and other supporting documents. The appendix further records a notice under Section 107(8) of the SGST Act and Form APL-02 rejecting the appeal against the cancellation order.

Issues Involved

The principal issues arising for consideration were:

  • Whether cancellation of GST registration under Section 29 of the CGST/SGST Act read with Rule 22 of the CGST/SGST Rules could be sustained without issuance of the prescribed show cause notice in Form GST REG-17.
  • Whether a notice concerning suspension of registration in Form GST REG-31 could substitute the statutory show cause notice contemplated before cancellation.
  • Whether the cancellation order was liable to be quashed when the respondent itself admitted that Form GST REG-17 had not been issued.
  • Whether quashing the cancellation order would prevent the tax authority from initiating or continuing fresh cancellation proceedings in accordance with law.

Petitioner’s Arguments

The petitioner argued that the statutory framework under Section 29 read with Rule 22 clearly contemplated issuance of a show cause notice before cancellation of GST registration.

It was submitted that:

  • the required show cause notice had to be issued in Form GST REG-17;
  • no Form GST REG-17 notice had been served upon the petitioner;
  • the only notice issued related to suspension of registration and was in Form GST REG-31; and
  • therefore, the subsequent cancellation order was procedurally unsustainable and liable to be interfered with.

The petitioner’s case was thus founded on non-compliance with the prescribed statutory procedure preceding cancellation of GST registration.

Respondents’ Arguments

The learned Senior Government Pleader fairly admitted before the Court that a show cause notice in Form GST REG-17 had not been issued to the petitioner.

It was submitted on behalf of the State that the necessary notice ought to have been automatically generated. However, rather than insisting upon technicalities, the State submitted that the matter could be remitted to the first respondent for reconsideration of the petitioner’s case.

The Court also heard learned counsel appearing for the third respondent before passing the final order.

Court Order / Findings

The Kerala High Court allowed the writ petition.

The Court ordered that:

  • Ext.P4 cancellation order was quashed;
  • the matter was remitted to the first respondent to complete the proceedings against the petitioner in accordance with law;
  • as a consequence of quashing Ext.P4, the petitioner’s GST registration, which had been cancelled under that order, would stand restored until a fresh decision was taken by the first respondent; and
  • the quashing of Ext.P4 would not prevent the first respondent from initiating or continuing proceedings for cancellation of registration against the petitioner in accordance with law.

Thus, the Court provided immediate relief against the impugned cancellation while expressly preserving the statutory authority’s power to proceed afresh through a legally compliant process.

Important Clarification

The judgment does not hold that the petitioner’s GST registration can never be cancelled. The relief was directed against the impugned cancellation order passed in the circumstances where the prescribed show cause notice in Form GST REG-17 had admittedly not been issued.

The most significant clarification is that:

Sections and Rules Involved

Section 29 of the CGST/SGST Act – Cancellation or suspension of GST registration.

Rule 22 of the CGST/SGST Rules – Procedure governing cancellation of registration.

Form GST REG-17 – Show cause notice for cancellation of registration, central to the petitioner’s challenge.

Form GST REG-31 – Referred to in the judgment as the notice issued to the petitioner regarding suspension of registration.

Section 107(8) of the SGST Act – Reflected in the petitioner’s exhibits concerning appellate proceedings.

Link to Download the Order https://mytaxexpert.co.in/uploads/1783321257_1060compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.