GST Cancellation Quashed: SCN Must Specify Date and Time for Personal Hearing.

Issue

Whether a GST registration cancellation order is legally valid if the preceding Show Cause Notice (SCN) failed to specify a date and time for a personal hearing, and no such hearing was conducted before the order was passed.

Facts

The GST department issued a Show Cause Notice (SCN) in Form GST REG-17 to the petitioner.
The SCN proposed to cancel the registration on the grounds that the assessee was not conducting any business from their declared place of business.
Crucially, the SCN did not specify any date or time for a personal hearing.
No personal hearing was ever conducted by the adjudicating authority.
Following the SCN, an order was passed cancelling the assessee’s registration.
A subsequent application filed by the assessee for revocation of this cancellation was also rejected.
The assessee filed a writ petition, arguing that both the cancellation order and the order rejecting revocation were invalid due to a violation of the principles of natural justice.

Decision

The High Court ruled in favour of the assessee and allowed the writ petition.
It held that the proceedings and the subsequent cancellation order suffered from a serious violation of the principles of natural justice.
The court stated that in the absence of a definite date and time for a hearing in the SCN, the assessee could not be expected to properly defend themselves.
Both the order of cancellation and the order rejecting the revocation were set aside.
The department was, however, granted the liberty to initiate fresh proceedings against the assessee in accordance with the law.

Key Takeaways

Hearing Details in SCN are Mandatory: A Show Cause Notice proposing an adverse action (like cancellation) must provide a clear and definite date, time, and venue for a personal hearing. Simply issuing a notice without these details is a fatal procedural flaw.
Natural Justice is Non-Negotiable: The right to be heard is a fundamental principle of natural justice. Passing an adverse order without providing an effective opportunity for an oral hearing renders the order legally unsustainable.
Assessee Cannot Be Expected to Guess: A taxpayer cannot be expected to defend themselves properly if they are never informed of when and where to appear for their hearing.
Procedural Failure Vitiates Order: The failure to follow the mandated procedure (offering a clear hearing opportunity) is not a minor irregularity but a serious defect that renders the entire order invalid and liable to be quashed.

HIGH COURT OF TELANGANA

Manikanta Enterprises

Deputy State Tax Officer

Aparesh Kumar Singh, CJ.
and G.M. MOHIUDDIN, J.

W.P. No. 27673 of 2025

SEPTEMBER 16, 2025

V. Siddharth Reddy and Karthik Ramana, learned counsels for the Petitioner. K.Sai Akarsh, learned counsel and Swaroop Oorilla, learned Special Government Pleader for the Respondent.

ORDER

1. Heard Mr. Karthik Ramana, learned counsel representing Mr. V.Siddharth Reddy, learned counsel for the petitioner and Mr. K.Sai Akarsh, learned counsel representing Mr. Swaroop Oorilla, learned Special Government Pleader for State Tax, for the respondents.

2. The impugned show cause notice for cancellation of registration dated 17.03.2025, lacks the ingredients of proper show cause notice, as required to be issued in Form GST REG-17 under Rule 22(1) of the Telangana State Goods and Services Tax Rules, 2017 (for short ‘the Rules’), as per Section 29 of the Telangana State Goods and Services Tax Act, 2017 (for short ‘the Act’), as it does not contain any date or time for appearance of the petitioner to explain its defence as against the alleged grounds proposed for cancellation of its GST registration. The show cause notice annexed a panchanama report on premises of the petitioner conducted on 15.03.2025. The show cause notice was followed by cancellation of registration on 28.03.2025 on the ground that the petitioner does not conduct any business from declared place of business. The application of the petitioner for revocation of cancellation of registration in Form GST REG-21 dated 27.05.2025, under Rule 23(1) of the Rules, was followed by show cause notice for rejection of application for revocation of cancellation of registration dated 30.05.2025, by the Deputy State Tax Officer. Thereafter, the application has been rejected by the order contained in Form GST REG-05 dated 11.06.2025 under Rule 9(4) of the Rules. The petitioner has assailed the show cause notice for cancellation of registration dated 17.03.2025, the order of cancellation of registration dated 28.03.2025 and the order of rejection of its application for revocation of cancellation of registration dated 11.06.2025.

3. Learned counsel for the petitioner submits that the order of cancellation read with show cause notice for cancellation of registration in Form GST REG-17 is vitiated as it has failed to follow the procedure prescribed under Rule 22 (1) of the Rules, which has caused prejudice to the petitioner. Respondents seem to be in haste to cancel the registration. Moreover, the application for revocation of cancellation of registration has also been dealt with in a hasty manner as immediately after the petitioner’s application dated 27.05.2025, show cause notice for rejection of such application has been issued in Form GST REG-23 on 30.05.2025. Petitioner has been thereby adversely affected for non-compliance of principles of natural justice.

4. Learned counsel for State Tax does not dispute that the show cause notice does not contain any date or time on which the petitioner was supposed to appear and defend itself.

5. We have considered the submissions of the learned counsel for the parties.

6. The proceedings initiated for cancellation of registration of the petitioner and the consequential order of cancellation of registration suffer from serious violation of principles of natural justice. Reference is made to the impugned notice in Form GST REG-17, which is extracted hereunder:

Reference No.: ZA360325044784E

Date: 17/03/2025

Registration Number (GSTIN/UIN):

36BLEPNO557M1ZS

Bandela Narsaiah

2-17/1, Shutter 1, Ground Floor,

Istakameswari Colony, Hyderabad,

Rangareddy, Telangana, 501505

Show Cause Notice for Cancellation of Registration

You are hereby directed to furnish a reply to the notice within seven working days from the date of service of this notice.

You are hereby directed to appear before the undersigned authority on undefined at undefined.

If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.

Please note that your registration stands suspended with effect from 17.03.2025.

Kindly refer the supportive document attached for case specific details.

Place: Telangana

Date: 17.03.2025

Nenagath Nageshwar Rao

Deputy State Tax Officer,

V anasthalipuram-II

7. In the absence of definite date and time, the petitioner could not be expected to defend himself properly before the order of cancellation of registration was passed. The impugned notice therefore lacks the ingredients for a proper show cause notice. Reference is made to the decision in Nkas Services (P.) Ltd. v. State of Jharkhand GSTL 18 (Jharkhand)/2022 (02) GSTPanacea 487 HC Jharkhand, which lays down that the show cause notice should fulfill the ingredients as required under the GST Act and the Rules made thereunder. Therefore, the impugned show cause notice for cancellation of registration dated 17.03.2025, the order of cancellation of registration dated 28.03.2025 and the order of rejection of application for revocation of cancellation of registration dated 11.06.2025 are set aside.

8. However, liberty is reserved with the respondents to initiate fresh proceedings for cancellation of registration of the petitioner, if such grounds exist in accordance with law.

9. Accordingly, the instant Writ Petition is allowed.

10. As a sequel, miscellaneous petitions, pending if any, stand closed. There shall be no order as to costs.