Case Details
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Title of Case: Global Power through its Proprietor Mohmedabid Mohmedhusen Lakhani v. State of Gujarat & Ors.
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Court: High Court of Gujarat at Ahmedabad
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Petition Number: Special Civil Application No. 2724 of 2025
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Date of Judgment: 11 July 2025
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Relevant Sections:
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Section 107, Gujarat GST Act, 2017 (Appeal)
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Section 108, Gujarat GST Act, 2017 (Revisional powers)
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Article 227, Constitution of India
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Category of Dispute: Cancellation of GST registration
Facts (Paras 2–3, 4.1–4.4)
The petitioner, engaged in ship material trading, was registered under the Gujarat GST Act. A show-cause notice dated 22 July 2021 was issued alleging invoice issuance without actual supply, causing wrongful ITC claims. The petitioner submitted an online reply on 30 July 2021. However, on the same day, the Assistant Commissioner cancelled the registration with retrospective effect from 1 July 2017 without hearing. An appeal under Section 107 was filed but dismissed on limitation grounds in November 2024. Before the High Court, the petitioner undertook (via affidavit) to file pending returns and pay tax, interest, penalty, and late fees, subject to verification.
Questions in Dispute (Paras 2–4)
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Whether cancellation of GST registration without proper reasons and hearing is valid?
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Whether dismissal of appeal on limitation forecloses relief, given violation of natural justice?
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Whether the matter should be remanded for fresh adjudication?
Observations (Paras 5–8)
The Court relied on Aggrawal Dyeing & Printing v. State of Gujarat (2022) where guidelines mandated detailed show-cause notices, supply of relied documents, and opportunity of hearing to avoid arbitrary cancellations. The Court noted that despite these binding directions, authorities continued issuing cryptic notices and orders, thereby forcing dealers into unnecessary litigation. It emphasized that once an appeal is dismissed on limitation, revisional powers under Section 108 cannot rescue the taxpayer. Procedural fairness must be upheld scrupulously.
Judgment (Paras 8–11)
The Court quashed both the cancellation order and the appellate dismissal. The matter was remanded to the Assessing Officer at the show-cause stage. The officer must now:
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Supply detailed reasons within two weeks.
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Allow petitioner two weeks to file reply.
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Provide personal hearing.
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Pass a speaking order within four weeks thereafter.
The petitioner’s registration shall remain suspended until disposal of the fresh proceedings. The Court clarified it had not examined the merits.
Table of Cases Referred
| Case | Citation | Verdict |
|---|---|---|
| M/s Aggrawal Dyeing & Printing v. State of Gujarat | (2022) 137 Taxmann.com 332 (Guj.) | Cryptic cancellation notices/orders without reasons are invalid; authorities must issue detailed SCNs, supply relied material, and provide hearing; violation of natural justice quashes cancellation. |
Between Fine Lines
This judgment reinforces that GST registration cannot be cancelled casually through template notices and ex-parte orders. Businesses must be given detailed reasons and a fair hearing. For trade, the ruling means that even if appeals are time-barred, arbitrary cancellations can still be challenged successfully under writ jurisdiction. Dealers should also proactively file pending returns and cooperate during proceedings to avoid prolonged suspension of registration.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
