Tax Registration Wrongly Canceled: Authorities Ordered to Restore Rights and Complete Fair Assessment Procedure Respecting Natural Justice

HC found tax registration cancellation unlawful due to lack of notice and violation of natural justice principles. Order was quashed, registration restored, and bank account defreezing directed. Court emphasized pandemic-related delays should not be used against taxpayer and ordered authorities to complete assessment procedurally, providing relief to the petitioner.

---

---

Issues:
1. Cancellation of registration under Bihar Goods and Services Tax Act, 2017 without notice or opportunity to respond.
2. Violation of principles of natural justice in cancellation order.
3. Failure to condone delay in accepting returns post-Covid-19 pandemic.
4. Relief sought for quashing of cancellation order, restoration of registration, and defreezing of bank account.

Analysis:
1. The petitioner's registration under the Bihar Goods and Services Tax Act, 2017 was cancelled by the Joint Commissioner of State Tax without issuing a notice to show cause or providing an opportunity to respond. The order lacked essential details and failed to explain the reason for cancellation, violating principles of natural justice. The petitioner was subjected to civil and penal consequences without due process, necessitating the cancellation order to be quashed.

2. The cancellation order was deemed nonspeaking and cryptic, rendering it incomprehensible and unjust. The lack of reference to the show cause contents and response further highlighted the violation of natural justice. The order's ambiguity and failure to provide a clear rationale for cancellation warranted its annulment to prevent unjust penal and pecuniary implications on the petitioner.

3. Despite the petitioner's request for condonation of delay in filing returns due to the Covid-19 pandemic, the authorities failed to consider the circumstances and proceeded with the cancellation. The petitioner's diligent efforts post-pandemic to resume operations should have been taken into account, and the delay should have been condoned. The failure to address the delay issue further underscored the unjust nature of the cancellation order.

4. Consequently, the High Court quashed the cancellation order, directed the restoration of the petitioner's registration, and instructed the Commissioner of State Taxes to finalize the assessment and issue appropriate orders in compliance with the law. The relief sought for the defreezing of the petitioner's bank account and a prohibition on coercive recovery actions during the petition's pendency were also granted. The Court emphasized that the delay in filing returns should not be raised again, bringing closure to that particular issue.

In conclusion, the writ petition was allowed, and any related interlocutory applications were disposed of accordingly.

---