Facts of the Case

The petitioner, M/s. Sivicon Life Sciences Private Limited, filed a writ petition before the High Court for the State of Telangana at Hyderabad challenging an Appeal Rejection Order dated 10.08.2023 (Order-in-Appeal No. HYD-GST-MD-AP2-070-2023-24) passed by the Additional Commissioner Appeals-I, as well as the underlying order dated 23.03.2023 cancelling the petitioner's GST registration passed by the Superintendent of Central Tax, Malkajgiri. The petitioner's case was that the cancellation of registration had been carried out without issuance of any show-cause notice, in violation of natural justice, and that the delay in filing returns had occurred because the petitioner's Chartered Accountant had passed away, a fact of which the petitioner had no knowledge or notice at the relevant time. The petitioner expressed readiness to pay the applicable late fee and sought restoration of the registration and setting aside of the appeal-rejection order. The petitioner had also moved an interlocutory application under Section 151 CPC seeking suspension of the operation of the appeal-rejection order pending final disposal of the writ petition, given the immediate commercial consequences of an inoperative GSTIN for a business entity. The matter was heard by a Division Bench comprising Justice P. Sam Koshy and Justice Laxmi Narayana Alishetty, the same Bench that had, only weeks earlier, decided a materially similar controversy involving cancellation of GST registration for delayed filing of returns.

Issues Involved

  1. Whether cancellation of the petitioner's GST registration without issuance of a show-cause notice violated the principles of natural justice.
  2. Whether the appellate authority was justified in dismissing the petitioner's appeal against the cancellation order.

Petitioner's Arguments

  • The entire action of cancellation of registration was carried out without issuance of any show-cause notice, in utter violation of the principles of natural justice.
  • The delay in filing returns was attributable to the death of the petitioner's Chartered Accountant, of which the petitioner had no knowledge, and the petitioner was ready to pay the applicable late fee for the belated returns.
  • Reliance was placed on Division Bench decisions of the same High Court in W.P. Nos. 35040 and 35071 of 2022, W.P. No. 34126 of 2022, and W.P. No. 2561 of 2023, where similar cancellation orders were set aside subject to payment of late fees.

Respondent's Arguments

  • The Senior Standing Counsel for CBIC appeared for the respondents but did not dispute the legal precedents cited by the petitioner's counsel.

Court Order/Findings

  • The Court noted that in a recent decision in W.P. No. 2561 of 2023, the very same Bench had set aside a cancellation of registration subject to the petitioner paying the requisite late fees for delayed submission of returns and had ordered restoration of registration.
  • Following the consistent line of its own Division Bench precedents, the Court allowed the writ petition, quashing both the Appeal Rejection Order dated 10.08.2023 and the Order of Cancellation of Registration dated 23.03.2023, and remitted the matter to the Superintendent of Central Tax to consider restoration subject to payment of the applicable late fee.
  • The Court further clarified that since the matter stood remitted, the question of limitation should not stand in the way of the petitioner seeking restoration of the registration.
  • The petition was allowed without costs, and connected miscellaneous petitions, if any, were closed.

Important Clarification

Cancellation of GST registration for delayed filing of returns, carried out without a proper show-cause notice, is liable to be set aside; following consistent precedent, courts will remit the matter for restoration of registration subject to payment of late fees, and will direct that limitation not operate as a bar in the remitted proceedings.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — provisions on issuance of show-cause notice prior to cancellation of registration.
  • Central Goods and Services Tax Act, 2017 — appellate provisions against orders of adjudicating/proper officers.

Decision – In Favour of

The decision is clearly in favour of the Assessee. Both the appeal-rejection order and the registration-cancellation order were quashed, with restoration made contingent only on payment of late fees, and the limitation bar was expressly removed for the remitted proceedings.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: WRIT PETITION NO: 28927 OF 2023
  • CNR: Not available
  • Coram: The Hon'ble Sri Justice P. Sam Koshy and The Hon'ble Sri Justice Laxmi Narayana Alishetty
  • Decision Date: 16.10.2023
  • Disposal Nature: Writ allowed; appeal rejection order and GST registration cancellation set aside

Link to Download the Order

Download the full judgment (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.