GST registration cancellation quashed due to violation of natural justice and non-reasoned orders by authorities

The Gujarat HC quashed the cancellation of petitioner's GST registration and related orders dated 29.11.2021, 25.03.2022, and 22.09.2022. The court found violation of natural justice principles due to non-reasoned orders by authorities. The appellate authority failed to decide the matter on merit, citing lack of power to condone delay. Following precedent in Aggarwal Dyeing case, the court held that speaking order doctrine mandates proper reasoning as heart and soul of decisions. The petitioner's GST registration was restored forthwith, with directions to authorities to follow proper legal procedure.

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Issues:
Challenge to cancellation of registration on grounds of breach of natural justice and lack of merit by appellate authority.

Analysis:
1. The petitioner challenged the cancellation of their GST registration on the basis of two main issues. Firstly, they argued that the cancellation order lacked reasoning and violated the principles of natural justice. Secondly, they contended that the appellate authority refused to decide on the merits of the case due to a delay in filing the appeal.

2. The prayers sought by the petitioner included admission and allowance of the petition, issuance of a writ quashing the cancellation order, revocation of the GST registration, and any other appropriate relief in the interest of justice.

3. The petitioner, a civil construction company, had its GST registration canceled after a show cause notice in November 2021, with the impugned order dated March 2022.

4. The appeal to the respondent No.2 was rejected due to being filed after 75 days, beyond the statutory limit of 30 days for condonation of delay, leaving the petitioner with no efficacious remedy.

5. The absence of a constituted GST Tribunal led the petitioner to approach the High Court seeking relief.

6. The learned AGP argued against condoning the delay, stating that there were no reasonable grounds for it, and even if there were, the delay exceeded the statutory limit of 30 days.

7. The Court referred to a previous decision involving Aggarwal Dyeing and Printing Works, highlighting the importance of adherence to natural justice principles and the necessity of providing reasons in decisions.

8. Quoting the Aggarwal Dyeing case, the Court emphasized the significance of reasons in administrative and quasi-judicial orders, stating that they are essential for transparency, accountability, and ensuring justice is not only done but also appears to be done.

9. The Court, without opining on the power to condone delay beyond the statutory period, ruled in favor of the petitioner, quashing the show cause notice and impugned orders, and granting liberty to issue a fresh notice with detailed reasons and provide a fair hearing to the petitioner.

10. Following the precedent set by the Aggarwal Dyeing case, the Court allowed the petition, restored the GST registration, and directed the respondent to follow due process in deciding the matter.

In conclusion, the High Court's judgment focused on upholding the principles of natural justice, emphasizing the importance of providing detailed reasons in decisions and ensuring a fair hearing for the parties involved. The ruling granted relief to the petitioner by quashing the cancellation order and directing the respondent to follow the legal procedure in deciding the matter.

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