2024 (2) TMI 556 - HC - GST

Tax Registration Cancellation Overturned: Lack of Reasoning Invalidates Original and Appellate Orders, Petitioner Granted Opportunity to Respond

HC allowed the writ petition challenging tax registration cancellation. The court found the original order and appellate order lacked proper reasoning and ... Time Limitation - Cancellation of GST registration of petitioner - non-application of mind - no adequate reason for such cancellation - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh's case [2023 (8) TMI 1262 - ALLAHABAD HIGH COURT], wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated February 1, 2021 and the appellate order dated January 19, 2024 are quashed and set aside - Petition allowed. Issues Involved:The issues involved in this case are the cancellation of registration under the Uttar Pradesh Goods and Services Tax Act, 2017 and the lack of application of mind in passing the orders.Cancellation of Registration:The petitioner challenged the order for cancellation of registration dated February 1, 2021, and the order passed in appeal u/s 107 of the Act. The petitioner argued that the cancellation order was passed without proper application of mind, as evident from discrepancies in the order itself. The petitioner relied on previous judgments emphasizing the importance of providing reasons in judicial proceedings. The Court found that the cancellation order lacked reasoning and did not meet the requirements of Article 14 of the Constitution of India. Consequently, the impugned order was set aside, and the petitioner was directed to file a reply to the show-cause notice for fresh adjudication.Lack of Application of Mind:The petitioner contended that the order cancelling the registration lacked application of mind, which affected the petitioner's right to conduct business as guaranteed u/s Article 19 of the Constitution of India. The petitioner argued that the order did not disclose any application of mind and was devoid of reasons. Citing legal precedents, the petitioner highlighted the necessity for administrative or quasi-judicial authorities to provide reasons in their orders. The Court observed that the order in question did not contain any reasons justifying the drastic action of cancellation of registration. As a result, the Court set aside the impugned order and directed the petitioner to file a reply to the show-cause notice for a fresh adjudication process.Conclusion:In conclusion, the High Court quashed and set aside the original order for cancellation of registration and the appellate order. The Court directed the petitioner to file a reply to the show-cause notice within three weeks and instructed the adjudicating authority to conduct a fresh hearing and pass a new order. The writ petition was allowed with these directions.