The Andhra Pradesh High Court set aside the cancellation of a scrap dealer’s registration because the notice gave no particulars of wrongly availed credit and fixed a hearing under two hours after issue.

A show cause notice (SCN) that alleges wrongful availment of input tax credit (ITC) without any particulars, and fixes a personal hearing less than two hours after it is issued, cannot support cancellation of GST registration, the Andhra Pradesh High Court has held [Ayyappa Enterprises v. Assistant Commissioner of State Tax & Ors., 2026-juristway.com-3479-HC(Andhra Pradesh)-GST].

The Division Bench of Justice Ninala Jayasurya and Justice T.C.D. Sekhar, who wrote the order, allowed the writ petition of a dealer in ferrous waste and scrap.

The SCN of 18 Aug 2026 proposed cancellation on the ground of wrongly availed ITC, suspended the registration and gave seven working days to reply. It was digitally signed at 12:21:33 IST, yet directed the dealer to appear for a hearing at 14:00 hours the same day. The registration was cancelled on 3 Sep 2026, with the order recording that the dealer had obtained fraudulent ITC from various non-genuine taxpayers.

The Government Pleader fairly conceded that the same-day hearing had been fixed inadvertently.

The Court held it impracticable for anyone to appear within about an hour and 40 minutes, observing that “no prudent assessee would keep a track to the portal all the time”. Having allowed seven working days for a reply, the officer had no reason to call for a hearing on the day of issue.

The Court found the SCN bereft of particulars: it gave no details of the ITC said to be wrongly used, so the dealer could not reply meaningfully. The finding of fraudulent credit from non-genuine suppliers in the cancellation order was not backed by any documents. A reference to documents “attached separately” did not help, since unless material is specifically mentioned in the SCN the taxpayer has no occasion to answer it.

The SCN and the cancellation order were set aside, with liberty to the officer to take fresh action in accordance with law.

2026-juristway.com-3479-HC(Andhra Pradesh)-GST