2022 (5) TMI 1076 - HC - GST

Registration cancellation overturned due to flawed inspection procedure requiring proper notice to all parties

Rohit Varma. Versus Assistant Commissioner, Burtola, Kolkata North & Ors.

The HC allowed the appeal challenging cancellation of registration. The authority's procedure was found thoroughly flawed as during inspection, while a ... Revocation of cancellation of registration of petitioner - it is alleged that the appellant did not carry any business from the declared place and the documents filed by the appellant in support of the same are not correct - HELD THAT:- The procedure adopted by the authority while cancelling the registration was thoroughly flawed. Admittedly, when an inspection was conducted by the officers of the department, one of the person, who represented to be the receptionist of the building affirmed that one Mr. Dilip Kumar Agarwal, who was the power of attorney agent of the appellant, Mr. Rohit Varma, used to come to the premises and carried on certain business activities. Nevertheless, the said receptionist could not recognise Mr. Rohit Varma whose photograph appears to have been shown to the said receptionist - The proper course that should have been adopted is to issue a notice directing Mr. Rohit Varma and Mr. Dilip Kumar Agarwal to be personally present in the office of the respondent and the landlord of the premises also should have been summoned. If all the three parties are present, the correct facts will come to light. Had this procedure been adopted, the truth would have been established and a proper order could have been passed either way. The matter requires to be remanded to the original authority, namely, first respondent to redo the matter by conducting a proper enquiry. In the result, the appeal is allowed. Issues:Challenge against order of cancellation of registration under WBGST Act, 2017; Jurisdiction of High Court under Article 226; Validity of cancellation based on flawed procedure.Analysis:1. The appellant challenged the order of cancellation of registration under the WBGST Act, 2017, issued by the Joint Commissioner. The appellate authority upheld the cancellation citing lack of business activity at the declared place. The High Court noted that the appellant had no other remedy under the Act, justifying the invocation of Article 226 jurisdiction. The Court can review decisions for procedural fairness, natural justice violations, or lack of jurisdiction, disagreeing with the lower court's view that disputed factual issues bar writ petitions.2. The appellant's counsel argued that the cancellation procedure was flawed, emphasizing the legal issue of repeated show cause notices for the same grounds. Despite leaving this issue open, the High Court found the cancellation process deeply flawed. The Court criticized the reliance on a receptionist's statement without further verification. It suggested summoning involved parties for a comprehensive inquiry to establish the truth, indicating procedural errors in the cancellation process.3. Consequently, the High Court set aside the lower court's order, remanding the matter to the original authority for a proper inquiry. The Court directed the authority to summon the appellant's proprietor, power of attorney agent, and the premises' landlord for a personal appearance. Emphasizing the importance of a fair and thorough investigation, the Court outlined specific instructions for the authority to conduct a fresh inquiry, receive relevant documents, and issue a reasoned order based on merits and legal principles.4. The High Court mandated strict compliance with the appearance notice, warning against claims of improper service. The order highlighted the need for personal service on the landlord to ensure presence during the inquiry. The Court stressed the urgency of providing certified copies of the order to all parties promptly upon fulfillment of legal requirements, underscoring the significance of procedural correctness and adherence to legal formalities in the judicial process.