Facts of the Case

The petitioner, M/s Ajit Associates Architectural Consultants Pvt. Ltd., an assessee under the GST Act providing architectural services, regularly filed returns until August 2017 but subsequently defaulted, which the petitioner claimed was unintentional. By 2022, while regularising its returns, the petitioner discovered that its registration had been cancelled in 2021 pursuant to a show cause notice (Ext.P1) issued in 2019. Ext.P2, the cancellation order dated 14.12.2020, was issued by a different (succeeding) officer, Smt. T.A. Omana, than the one who had issued the original show cause notice, Smt. P.R. Seema. The petitioner had since filed all defaulted returns up to February 2021 and had also filed an appeal against Ext.P2 with a delay of 230 days, along with a condonation application.

Issues Involved

  1. Whether an order cancelling GST registration is valid where it is passed by an officer other than the one who issued the original show cause notice, without a fresh notice or hearing by the succeeding officer.
  2. Whether absence of a Document Identification Number (DIN) on the cancellation order rendered it invalid.

Petitioner's Arguments

  • The proviso to Section 29(2) of the GST Act requires that the 'proper officer' not cancel registration without giving the person an opportunity of hearing; since the succeeding officer who actually passed Ext.P2 never issued notice or heard the petitioner, this requirement was violated.
  • Reliance was placed on decisions under the Income-tax and Wealth-tax Acts (Anantha Naganna Chetty, Chitra Mukherjee, Azizunnissa Begum, M. Sreedharan, Jagdish Prasad Choudhary) holding that a succeeding officer must put the assessee on notice before continuing proceedings left by a predecessor.
  • Ext.P2 also lacked a Document Identification Number (DIN), contrary to Circular No. 128/47/2019-GST requiring every order to bear one with effect from 24.12.2019.
  • The petitioner had already submitted the defaulted returns, making cancellation unnecessary.

Respondent's Arguments

  • A separate notice affording opportunity is not required merely because there has been a change of the assessing officer.
  • Alternate statutory remedies were available to the petitioner.

Court Order / Findings

  • The Court distinguished the income-tax/wealth-tax precedents on the basis that under the GST Act, the proviso to Section 29(2) specifically uses the phrase 'proper Officer', which the Court read as necessarily implying that the officer actually passing the cancellation order must independently hear the concerned person.
  • The Court held that the requirement that the succeeding officer put the assessee on notice is expressly embedded in the statutory language of the proviso to Section 29(2) of the GST Act, and since admittedly there was no hearing by the officer who issued Ext.P2, the petitioner was entitled to relief.
  • Ext.P2 cancellation order was quashed, and since the petitioner had already submitted returns for the defaulted periods, the respondents were directed to treat the petitioner's registration as not cancelled.

Important Clarification

Under the proviso to Section 29(2) of the CGST Act, where the officer who ultimately cancels a GST registration is different from the officer who issued the original show cause notice, the succeeding 'proper officer' must independently put the assessee on notice and hear them before passing the cancellation order — a change of officer alone does not dispense with this requirement, distinguishing GST's explicit statutory language from analogous provisions under the Income-tax/Wealth-tax Acts.

Sections Involved

  • Section 29(2), Central Goods and Services Tax Act, 2017 – empowers the proper officer to cancel registration on specified grounds, subject to a proviso mandating an opportunity of hearing before cancellation.
  • Circular No. 128/47/2019-GST, dated 23.12.2019 – mandates a Document Identification Number (DIN) on every communication/order issued by GST authorities from 24.12.2019 onward.

Decision – In Favour of

The writ petition was allowed and the cancellation order quashed, with the registration to be treated as not cancelled — the outcome favours the Assessee.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WP(C) No. 41275 of 2022
Coram: Hon'ble Mr. Justice T.R. Ravi
Date of Order: 01.08.2023

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