M/S.Telangana Recycling Private … vs The State Of Telangana on 7 May, 2025

Telangana High Court

M/S.Telangana Recycling Private … vs The State Of Telangana on 7 May, 2025

Author: Surepalli Nanda

Bench: Surepalli Nanda

           HON'BLE MRS. JUSTICE SUREPALLI NANDA
                                      AND
             HON'BLE SRI JUSTICE J. SREENIVAS RAO


               WRIT PETITION No.15018 OF 2025

JUDGMENT:

(Per the Hon’ble Mrs Justice Surepalli Nanda)

Heard Sri B. Krishna Reddy, learned counsel appearing

on behalf of the petitioner and the learned Special

Government Pleader for State Tax appearing on behalf of the

respondents.

2. The petitioner approached the Court seeking prayer as

under:

“….to issue Writ of Mandamus or any other
appropriate Writ or Order or Direction declaring the action
of the 2nd Respondent in passing the impugned Order
dated 17.04.2025 in Ref.No. ZA360425045250W for
cancellation of registration certificate of the petitioner vide
GSTIN: 36AALCT2319K2Z1 along with the show cause
notice dated 29.03.2025, as illegal, arbitrary, high handed,
contrary to the provisions of the CGST Act, 2017 and in
violation of principles of natural justice and set aside the
same as null and void, and pass such other order orders as
the Hon’ble Court deem fit and proper in the circumstances
of the Case.”

2

3. The case of the petitioner, in brief, is that respondent No.2

issued a show-cause notice dated 29.03.2025 to the petitioner,

alleging that the commodities mentioned in the e-way bills did not

match with the registrations and that the functioning of the

petitioner was in contravention to the GST Act and Rules. However,

the notice was vague and failed to specify precise grounds or

charges alleged against the petitioner. Despite the vague show-

cause notice and the absence of supportive documents, respondent

No.2 issued a cancellation order dated 17.04.2025, cancelling the

petitioner’s GST registration vide GSTIN: 36AALCT2319K2Z1 with

retrospective effect from 29.12.2024, without assigning any valid

reason or affording a proper reasonable opportunity to respond.

Aggrieved by the same, the petitioner has filed the present writ

petition.

4. PERUSED THE RECORD

A) The impugned Show cause Notice for cancellation of

Registration dated 29.03.2025 is extracted hereunder:

“FORM GST REG-17
[See Rule 22(1)]

Reference No.: ZA360325152465J
To Date: 29/03/2025
Registration Number (GSTIN/UIN): 36AALCT2319K2Z1
3

TELANGANA RECYCLING PRIVATE LIMITED
1-8-505/C/13/1, PRAKASH NAGAR, BEGUMPET, Hyderabad,
Hyderabad, Telangana, 500016

Show Cause Notice for Cancellation of Registration

Whereas on the basis of Information which has come to my
notice, it appears that your registration is liable to be cancelled
for the following reasons:

1. Others
Remarks:

In contraventions to the GST Act and Rules, Commodity
mentioned in the Way bills are not matching with the
registrations.

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 03/04/2025 at 13:00.

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 29/03/2025.

Kindly refer the supportive document attached for case specific
details.

Place: Telangana
Date: 29/03/2025
IVVALA HEMALATHA
Deputy State Tax Officer
BEGUMPET-1
4

Signature Not Verified.”

B) The order impugned dated 17.04.2025 is extracted

hereunder:

“FORM GST REG-19
[See rule 22(3)]

Reference Number: ZA360425045250W
Date: 17/04/2025
To
Name: TELANGANA RECYCLING PRIVATE LIMITED
Address: 1-8-505/C/13/1, PRAKASH NAGAR, BEGUMPET,
Hyderabad, Hyderabad, Telangana, 500016
GSTIN/UIN: 36AALCT2319K2Z1
Application Reference Number (ARN): AA3603250507192
Date:

Order for Cancellation of Registration
This has reference to show cause notice issued dated
29/03/2025.

Whereas no reply to the show cause notice has been
submitted; and whereas, the undersigned based on
record avallable with this office is of the opinion that your
registration is liable to be cancelled for following
reason(s):

1. Others
Remarks:

In contraventions to the GST Act and Rules, Commodity
mentioned in the Way bills are not matching with the
registrations. Reasonable opportunity given for 7 working days
and informed Tax payer to respond on the show cause notice
and prove his genuineness. No reply for the Show cause notice
issued and none of the members of the TELANGANA RECYCLING
PRIVATE LIMITED
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Further, huge e-ways bills was raised in the month of
March 2025 about 12 cr+ with in 15 to 20 days. Seems
suspicious and requested the Tax payer for the clarification to
identify the genuinety. Still there is no response from the Tax
payer.

Hence Cancelling the Registration.

The effective date of cancellation of your
registration is 29/12/2024.

2. Kindly refer to the supportive document(s) attached for case
specific details. – Not Applicable

3. It may be noted that a registered person furnishing return
under sub-section (1) of section 39 of the CGST Act, 2017 is
required to furnish a final return in FORM GSTR-10 within three
months of the date of this order.

4. You are required to furnish all your pending returns.

5. It may be noted that the cancellation of registration shall not
affect the liability to pay tax and other dues under this Act or to
discharge any obligation under this Act or the rules made
thereunder for any period prior to the date of cancellation
whether or not such tax and other dues are determined before
or after the date of cancellation.
Place: Telangana
Date: 17/04/2025
IVVALA HEMALATHA
Deputy State Tax Officer
BEGUMPET – I”

DISCUSSION AND CONCLUSION:

DISCUSSION:

5. Learned counsel appearing on behalf of the petitioner

mainly puts forth the following submissions:-

(a) The show-cause notice dated 29.03.2025, issued to the

petitioner by the 2nd respondent for cancellation of petitioner’s
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registration, is vague and does not provide specific details regarding

the alleged contraventions of the GST Act and Rules in relation to

the commodities mentioned in the e-way bills. As a result, the

petitioner was unable to submit a proper explanation in response to

the vague show-cause notice dated 29.03.2025 issued to the

petitioner.

(b) Without affording the petitioner an adequate

opportunity to respond to the said Show cause notice dated

29.03.2025, the impugned order dated 17.04.2025, had been

passed, cancelling the petitioner’s registration w.e.f., 29.12.2024,

stating that the petitioner failed to respond to the show-cause

notice dated 29.03.2025.

(c) The learned counsel appearing on behalf of the

petitioner further contends that in the absence of a proper and

specific notice, any enquiry or subsequent action stands vitiated.

(d) No supporting documents were enclosed along with the

show cause notice dated 29.03.2025 issued to the petitioner as

alleged by the respondents in the show cause notice dated

29.03.2025.

Based on the aforesaid submissions the learned counsel

appearing on behalf of the petitioner contended that the

petitioner is entitled for the relief as prayed for.
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6. The learned Special Government Pleader appearing on

behalf of the respondents mainly puts-forth the following

submissions:-

i) The impugned show-cause notice for cancellation of registration

dated 29.03.2025 clearly indicates that a supporting document was

attached, providing case-specific details along with the said notice.

ii) There is no illegality in the order impugned, dated 17.04.2025

cancelling petitioner’s registration w.e.f.29.12.2024 since petitioner

failed to respond to show-cause notice, dated 29.03.2025.

iii) The petitioner failed to appear before the 2nd respondent on

03.04.2025 at 13:00 therefore, petitioner cannot challenge the

order impugned dated 17.04.2025 issued by the 2nd respondent.

Based on the aforesaid submissions, the learned Special

Government Pleader appearing on behalf of the respondents

contended that the present Writ Petition needs to be

dismissed.

CONCLUSION:-

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7. A bare perusal of the order impugned dated 17.04.2025

issued to the petitioner by the 2nd respondent (referred to

and extracted above) indicates the 3rd para as under:-

” Further huge e-ways bills was raised in the month of

March, 2025 about 12 cr+ within 15 to 20 days seems

suspicious and requested the Tax Payer for the

clarification to identify the genuinety still there is

response from the Tax payer”.

A bare perusal of the show-cause notice, dated

29.03.2025 of the 2nd respondent (referred to and extracted

above) does not indicate any charge having been framed by

the 2nd respondent against the petitioner in the impugned

show-cause notice dated 29.03.2025 issued to the petitioner

by the 2nd respondent pertaining to the above referred

subject issue pertaining to huge e-ways bills having been

raised in March, 2025 about 12 cr+ within 15 to 20 days,

therefore, this Court agrees with the main submission put-

forth by the learned counsel appearing on behalf of the

petitioner that the impugned show-cause notice dated

29.03.2025 issued to the petitioner by the 2nd respondent is

very vague and hence, petitioner could not submit his
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explanation to the said show-cause notice issued to the

petitioner by the 2nd respondent, dated 29.03.2025.

8. This Court opines that the plea of the learned Special

Government Pleader appearing on behalf of the respondents

that a supporting document was enclosed along with the

show-cause notice, dated 29.03.2025 giving details of the

allegations leveled against the petitioner is however

disputed by the learned counsel appearing on behalf of the

petitioner, placing reliance on the specific averments made

at paragraph No.5 of the affidavit filed by the petitioner in

support of the present writ petition, contending that no

supporting documents were attached to the show-cause

notice for cancellation of registration dated 29.03.2025, as

contended by the respondents.

9. This Court opines that the said supporting documents even if

had been forwarded to the petitioner along with the show cause

notice dated 29.03.2025 issued to the petitioner cannot be treated

as part of the show-cause notice, as the details of the alleged

contraventions to the GST Act and Rules alleged against the

petitioner are admittedly not described in the said show-cause
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notice dated 29.03.2025 issued to the petitioner to enable the

petitioner to submit petitioner’s explanation to the said show cause

notice. In view of the fact that the impugned order dated

17.04.2025 is not an order passed on merits, and the Show cause

notice dated 29.03.2025 issued to the petitioner by the 2nd

respondent admittedly as borne on record is very vague, this Court

opines that the impugned order dated 17.04.2025 had been passed

mechanically and without proper application of mind.

10. The Apex Court in the Judgment reported in (2010) 13

SCC 427 in Oryx Fisheries Pvt., Ltd., Vs. Union of India &

Others, in its Head note duly referring the relevant paras

of the said judgment, observed as under :

“It is well settled that a quasi-judicial authority, while acting
in exercise of its Statutory power must act fairly and must act
with an open mind while initiating a show- cause proceeding.
A show-cause proceeding is meant to give the person
proceeded against a reasonable opportunity of making his
objection against the proposed charges indicated in the
notice. (Para 24).

At the stage of show-cause, the person proceeded
against must be told the charges against him so that he
can take his defence and prove his innocence. At that
stage the authority issuing the charge-sheet, cannot,
instead of telling him the charges, confront him with
definite conclusions of his alleged guilt. If that is done,
as has been done in the present case, the entire
proceeding initiated by the show-cause notice gets
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vitiated by unfairness and bias and the subsequent
proceedings become an idle ceremony. (Para 27)

Justice is rooted in confidence and justice is the goal of a
quasi-judicial proceeding also. If the functioning of a quasi-
judicial authority has to inspire confidence in the minds of
those subjected to its jurisdiction, such authority must act
with utmost fairness. Its fairness is obviously to be
manifested by the language in which charges are couched and
conveyed to the person proceeded against.

In the present case, from the show-cause notice it is clear
that the third respondent, Deputy Director, MPEDA HAS
demonstrated a totally closed mind at the stage of show-
cause notice itself. Such a closed mind is inconsistent with
the scheme of Rule 43 of the MPEDA Rules. (Para 29).

It is true that the show-cause notice cannot be read hyper
technically and it is well settled that it is to be read
reasonably. But, while reading a show-cause notice the
person who is subject to it must get an impression that he will
get an effective opportunity to rebut the allegations contained
in the show-cause notice and prove his innocence. If on a
reasonable reading of a show-cause notice a person of
ordinary prudence gets the feeling that his reply to the show-
cause notice will be an empty ceremony and he will merely
knock his head against the impenetrable wall of prejudged
opinion, such a show-cause notice does not commence a fair
procedure especially when it is issued in a quasi- judicial
proceeding under a statutory regulation which promises to
give the person proceeded against a reasonable opportunity
of defence. (para 31)

Therefore, while issuing a show-cause notice, the
authorities must take care to manifestly keep an open
mind as they are to act fairly in adjudging the guilt or
otherwise of the person proceeded against and
specially when the authority has the power to take a
punitive step against the person after giving him a
show- cause notice. (para 32)

The principle that justice must not only be done but it
must eminently appear to be done as well is equally
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applicable to quasi-judicial proceeding if such a
proceeding has to inspire confidence in the mind of
those who are subject to it. (para 33)”

Duly applying the observations of the Apex Court in the

judgment (referred to and extracted above) and duly

examining the contents of the impugned show-cause notice,

dated 29.03.2025, it is amply evident and borne on record

that admittedly, the impugned show-cause notice, dated

29.03.2025 issued by the 2nd respondent fails the test of

fairness and indicates bias.

11. TAKING INTO CONSIDERATION:

a) The facts and circumstances of the case,

b) The submissions made by the learned counsel

appearing on behalf of the petitioner,

c) The impugned Show cause notice dated 29.03.2025

(referred to and extracted above), which admittedly

indicates unfairness and bias

d) The order impugned dated 17.04.2025 (referred to and

extracted above), which admittedly is not an order

passed on merits
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e) The observations in the judgment of the Apex Court

reported in (2010) 13 SCC 427 (referred to and

extracted above)

This writ petition is allowed, and the impugned show-

cause notice dated 29.03.2025 issued by the 2nd respondent

to the petitioner and the order dated 17.04.2025, issued by

the 2nd respondent which pertains to the cancellation of

registration, are set aside.

It is however observed that the respondents are at

liberty to proceed against the petitioner in accordance to law

by issuing a fresh show-cause notice, clearly stating the

specific charges against the petitioner, so as to enable the

petitioner to submit his explanation with respect to the

allegations made against the petitioner. However, there

shall be no order as to costs.

Miscellaneous petitions, if any, pending in this writ petition,
shall stand closed.

___________________________
MRS. JUSTICE SUREPALLI NANDA

________________________
JUSTICE J.SREENIVAS RAO
Date: 07.05.2025
Note: Issue CC by today
b/o-SAI