Gujarat HC quashes GST registration cancellation order for lack of detailed reasoning under Section 29

The Gujarat HC quashed the GST registration cancellation order imposed with retrospective effect. The court found that respondent authorities failed to follow the precedent in Aggarwal Dyeing case, which mandates detailed reasoning in cancellation orders. The authorities violated the speaking order doctrine by not providing adequate reasons based on independent re-appreciation of evidence. The HC set aside the impugned order and granted liberty to respondents to issue fresh notice with detailed reasons for cancellation, if warranted. The petition was disposed of with directions for proper procedure compliance.

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Issues:
The issues involved in this case include the cancellation of registration certificate under the GST Acts, provisional attachment of the bank account of the petitioners, and rejection of the application for revocation of cancellation of registration.

Cancellation of Registration Certificate:
The petitioner sought relief through a writ petition to quash the impugned order retrospectively cancelling the registration certificate. The respondent authorities had provisionally attached the bank account of the petitioners without proper adjudication proceedings. The court found that the cancellation order did not provide reasons as required by the decision in Aggarwal Dyeing case. The court quashed the cancellation order and granted liberty to issue a fresh notice with detailed reasons if any.

Provisional Attachment of Bank Account:
The petitioners also sought relief to quash the provisional attachment of their bank account. It was noted that the petitioner did not press for this relief but requested the respondent authorities to decide the show cause notice within a stipulated time. The learned Assistant Government Pleader agreed that the authorities would decide on the show cause notice within four weeks.

Rejection of Application for Revocation of Cancellation:
The petitioners had applied for revocation of the cancellation of registration, which was rejected by the second respondent authority. The court did not delve into the merits of the case but focused on the procedural lapses and violation of natural justice. The decision in the Aggarwal Dyeing case was cited, emphasizing the importance of providing detailed reasons and evidence to the dealer before passing a cancellation order.

Conclusion:
In conclusion, the High Court quashed the cancellation order of the registration certificate with liberty to issue a fresh notice with detailed reasons. The court disposed of the petition with no orders as to costs, as the respondent authorities agreed to decide on the show cause notice within four weeks.

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