In the case of Saurabh Sahu v. The State of Maharashtra Through the Finance Secretary and Others, the Bombay High Court addressed the issue of the cancellation of a GST registration under the Maharashtra Goods and Services Tax Act, 2017 (MGST Act). Below is a detailed Summary of the Judgment delivered by Justice M. S. Sonak on July 1, 2025:

1. Background:

• The petitioner, Saurabh Sahu, challenged an order dated July 7, 2023, that cancelled his GST registration. This cancellation followed a show cause notice issued on June 12, 2023, under Section 29(2)(e) of the MGST Act, alleging that the registration was obtained by fraud, willful misstatement, or suppression of facts.

2. Key Points and Legal Provisions:

• The show cause notice was issued using Form GST REG-17 as mandated by Rule 22(1) and sub-rule (2A) of Rule 21A.
• Section 29(2)(e) of the MGST Act was cited in the notice as the ground for cancellation, indicating allegations of fraud or misrepresentation.

3. Court’s Observations:

• Vagueness of the Notice: The court observed that the June 12, 2023, show cause notice was vague and lacking specific details about the alleged fraud or misstatement. It merely cited the legal provision without specifying the exact nature of the allegations, rendering it deficient for forming an effective response from the petitioner.
• Natural Justice Concern: The court emphasized that a valid show cause notice must provide adequate particulars to enable the noticee to understand the charges and respond appropriately. The notice's vagueness violated principles of natural justice, as the petitioner was unable to discern the precise accusations.
• Technical Glitch Admission: The respondents, during the proceedings, attempted to introduce additional details supposedly attached to the notice but acknowledged a possible technical glitch that may have prevented the attachment from being displayed to the petitioner on the portal.

4. Judgment:

• The court set aside the impugned order dated July 7, 2023, primarily on the ground of breach of natural justice. It noted that action based on a vague notice is unsustainable.
• The court referenced its consistent approach in similar cases, highlighting a previous decision in Manek Steel LLP V/s. Union of India & Ors., where a similar notice was quashed due to lack of specificity.
• The ruling provided that the respondents are permitted to issue a fresh, detailed show cause notice aligned with principles of natural justice, allowing the petitioner to file a proper response.

 

5.Other Considerations:

 

• The court dismissed concerns regarding the delay in filing the petition, noting that the petitioner did not benefit from the delay and that no other rights had crystallized during this time.
• Despite the availability of alternative remedies like revocation or appeal, the court chose to intervene directly due to the gross breach of natural justice.

6. Directions:

• The respondents must issue a new, specific show cause notice within two weeks of the order's upload.
• The petitioner agreed to respond within two weeks of receiving the new notice.
• Service of the notice should occur via email and the portal to ensure proper receipt.
• All matters concerning the merits of the cancellation were left open for determination following the issuance and response to the new notice.

In Conclusion, the decision underscores the necessity of clarity and specificity in show cause notices under the GST regime, ensuring adherence to principles of natural justice and enabling effective legal recourse for alleged regulatory infractions.