Unreasoned GST registration cancellation order challenged; quashed as arbitrary, appeal time-bar u/s107(4) didn't merge

Cancellation of GST registration was assailed on the ground that the cancellation order was unreasoned. The HC held that reasons are the "heart and soul" of an administrative/quasi-judicial order, and an order entailing harsh civil consequences without any reasons is arbitrary and violative of Article 14; hence, it is unsustainable in law. The HC further held that dismissal of the statutory appeal as time-barred under s.107(4) does not attract the doctrine of merger because there was no adjudication on merits. The cancellation order was quashed, the petitioner was directed to file a reply to the show-cause notice within three weeks, and the authority was directed to pass a fresh order after affording an opportunity of hearing.

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Issues involved:
The issues involved in the judgment are the cancellation of registration of the petitioner and the dismissal of the appeal on the ground of delay under the UPGST Act.

Cancellation of Registration:
The petitioner challenged the cancellation of registration, contending that it was done without following the provisions of section 29 of the Act and without assigning any reason. The petitioner argued that the cancellation order was passed mechanically and without application of mind. The petitioner also highlighted that the order had an adverse effect on their right to run a business, guaranteed under Article 19 of the Constitution of India. The court found that the cancellation order lacked reasons, which is essential for any judicial or administrative order. Citing precedents, the court emphasized that the absence of reasons rendered the order unjustified in the eyes of the law. The court quashed the order dated 3.2.2023, directing the petitioner to file a reply to the show cause notice within three weeks for a fresh decision.

Dismissal of Appeal:
The appeal filed by the petitioner was dismissed on the grounds of delay, as it was beyond the period of limitation under section 107(4) of the Act. The petitioner argued that detailed reasons for the delay were not considered. The court noted that the doctrine of merger would not apply in this case, given the circumstances. Referring to previous judgments, the court reiterated the importance of providing reasons in administrative and quasi-judicial orders. The court highlighted that the appeal not being decided on merit meant that the doctrine of merger did not apply. The court allowed the writ petition, setting aside the order dated 3.2.2023 and directing a fresh decision after affording the petitioner an opportunity to present a defense.

Separate Judgment:
In a separate judgment, the court referenced previous cases to emphasize the necessity of providing reasons in administrative and quasi-judicial orders. The court set aside the order dated 15.03.2019, directing the petitioner to file a response to the show cause notice for a fresh decision. The court allowed the writ petition in terms of the said order.

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