SCN Lacked Time Or Date For Personal Hearing: Delhi High Court Directs Restoration Of GST Registration

The Delhi High Court has directed the restoration of GST registration as no opportunity for a hearing was accorded to the petitioner or assessee.

The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the show cause notice (SCN) does not mention any time or date for a personal hearing. Thus, the petitioner was not afforded a hearing to contest the SCN. The order cancelling the petitioner's registration is void as it has been passed in violation of the principles of natural justice.

The petitioner/assessee is an association of persons constituted by ATT Sys India Pvt. Ltd. and Estex Tele Private Limited. The petitioner was constituted in July 2015 to execute a contract dated October 28, 2014, awarded by the Indian Highway Management Company Limited (IHMCL) for conducting traffic surveys on national highways in Zone 4 (in the States of Uttar Pradesh, Bihar, and Jharkhand).

Pursuant to the enactment of the Acts relating to the levy of the Goods and Services Tax Act in 2017, the petitioner had obtained a registration number for the Goods and Services Tax Identification Number. The petitioner claimed that the contract awarded by IHMCL was terminated, which led to the disputes. The disputes were referred to arbitration, which culminated in an award in favour of the petitioner.

In terms of the arbitral award dated May 24, 2023, IHMCL was directed to make payments of Rs. 5,49,97,760 to the petitioner. The petitioner claims that it has not engaged in any other business apart from executing the contract in question and, therefore, has been filing nil returns.

Since the petitioner has received funds in terms of the arbitral award, the petitioner is now required to discharge the GST liabilities in respect of the amount. The petitioner stated that on examining the portal, it was discovered that the petitioner's GST registration was cancelled and, therefore, the petitioner has been unable to file its returns. The petitioner has paid GST in excess of Rs. 14.90 lakhs, which is lying deposited with the department.

The petitioner/assessee filed the petition, seeking directions to be issued for revoking the order cancelling the petitioner's GST registration.

The petitioner contended that GST registration was cancelled without the issuance of any show cause notice or without affording the petitioner any opportunity to be heard.

The department contended that the SCN was issued to the petitioner on November 27, 2020, proposing to cancel the petitioner's GST registration for filing zero returns for the last six months.

The court noted that, according to the petitioner, it did not receive the SCN. However, even if the respondent's contention is accepted that an SCN, a copy of which is handed over, was issued to the petitioner, it would be of little assistance to the respondent because the SCN does not mention any time or date for a personal hearing. Thus, the petitioner was not afforded a hearing to contest the SCN.

The court directed that the petitioner's GST registration be restored. The petitioner shall also comply with the statutory provisions by filing the returns in accordance with the law.

The court clarified that the order will not preclude the GST authorities from taking any further steps in accordance with the law if the petitioner has fallen foul of any statutory compliance.

Counsel For Petitioner: Vipul Kumar and Arushi Mishra

Counsel For Respondent: Rajeev Aggarwal

Case Title: ATT SYS India Pvt Ltd Estex Tele Private Limited Consortium Versus The Commissioner Goods And Services Tax Delhi

Citation: 2023 LiveLaw (Del) 1268

Case No.: W.P.(C) 14494/2023

Click Here To Read The Order