Facts of the Case

The petitioner, proprietor of Vijay Laxmi Trade Company, was issued a show cause notice by the Assistant Commissioner of State Tax, Raipur, proposing cancellation of GST registration on the ground of alleged non-compliance with Rule 21(a) and 21(b) of the CGST Rules, 2017. The petitioner's grievance was that the notice was issued without supplying the underlying documents, and even after the writ petition was filed and the department supplied some material relating to Rule 21(a), no specific invoices or bills were furnished to substantiate the allegation of non-supply of goods. The petitioner approached the High Court of Chhattisgarh under Article 226/227 seeking quashing of the show cause notice, while also expressing readiness to file a fresh, detailed objection if permitted.

Issues Involved

  1. Whether a show cause notice for cancellation of GST registration issued without supplying supporting documents/invoices violates principles of natural justice.
  2. Whether the writ court should quash such a notice outright or permit the assessee to file a fresh objection and have it adjudicated on merits.

Petitioner's Arguments

  • The show cause notice under Rule 21(a)/(b) was issued without supplying documents relied upon by the department.
  • Even the documents subsequently supplied did not identify specific invoices or bills relating to the alleged non-supply of goods.
  • The petitioner is willing to file a fresh, complete objection to the show cause notice if given an opportunity.

Respondent's Arguments

  • The petitioner had filed GST returns showing certain invoices and bills, but on physical inspection no business activity was found at the declared place of business.
  • No documents were found at the declared place of business of the petitioner-firm.
  • The department has no objection to any fresh objection filed by the petitioner being decided in accordance with law.

Court Order / Findings

  • The Court did not quash the show cause notice but disposed of the petition by granting the petitioner liberty to file a fresh objection within three days.
  • The Assistant Commissioner (respondent no. 1) was directed to consider and decide both the fresh objection and the original show cause notice dated 09.10.2025 within a further period of three weeks.
  • The adjudicating authority was directed to consider all objections raised by the petitioner in accordance with law and the CGST Rules.

Important Clarification

  • Where a registration-cancellation SCN under Rule 21 is challenged for want of supporting material, courts commonly resolve the writ by directing a fresh, time-bound opportunity to reply rather than quashing the notice outright.
  • An assessee's willingness to file a complete objection can itself become the basis for a consent-style disposal with a fixed timeline for adjudication.

Sections Involved

  • Rule 21(a) & 21(b), CGST Rules, 2017 – grounds for cancellation of registration, including non-conduct of business from the declared place of business and issuance of invoices without actual supply of goods.
  • Article 226/227, Constitution of India – writ jurisdiction invoked to challenge the show cause notice.

Decision – In Favour of

The petition was disposed of with directions rather than a decision on merits; the outcome is procedurally favourable to the assessee, since it secures a fresh opportunity to object and a time-bound, reasoned decision from the department, though the merits of the Rule 21 allegations remain open for adjudication.

Case Details

High Court of Chhattisgarh at Bilaspur; WPT No. 150 of 2025; Coram: Hon'ble Mr. Justice Naresh Kumar Chandravanshi; Order dated 03.11.2025.

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