2024 (3) TMI 330 - HC - GST

Tax Registration Cancellation Order Overturned: Procedural Flaws Expose Lack of Proper Reasoning and Constitutional Fairness

M/s Gaur And Sons Through Its Proprietor Narendra Gaur Versus State of Up And 2 Others

HC quashed tax registration cancellation order and appellate order due to lack of proper reasoning. Court found violations of constitutional principles ... Cancellation of registration of petitioner - time limitation - order for cancellation of registration has been passed without any application of mind - 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 March 2, 2022 and the appellate order dated August 1, 2023 are quashed and set aside. The petitioner is directed to file its reply to the show cause notice within three weeks from date and the adjudicating authority is directed to proceed de novo and pass order after granting opportunity of hearing to the petitioner. The writ petition is allowed. Issues involved:The issues involved in the judgment are the challenge to the order for cancellation of registration dated March 2, 2022, and the order dated August 1, 2023 passed in appeal under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017.Cancellation of Registration Order:The petitioner challenged the cancellation of registration order, arguing that it was passed without proper application of mind. The petitioner's counsel pointed out discrepancies in the order, where it mentioned both the submission and non-submission of a reply by the petitioner. Citing previous judgments, it was contended that the cancellation order lacked reasoning, which is essential for judicial or administrative decisions. The Court found the cancellation order to be without proper application of mind, violating Article 14 of the Constitution of India, and set it aside. The petitioner was directed to file a reply to the show-cause notice, and the Adjudicating Authority was instructed to pass a fresh order after providing an opportunity for a hearing.Appellate Order under Section 107:The petitioner also challenged the appellate order dated August 1, 2023, contending that it lacked reasoning and did not consider the merits of the case. Referring to previous cases emphasizing the importance of providing reasons in judicial proceedings, the petitioner argued for setting aside the appellate order. The Court agreed with the petitioner, stating that the impugned orders were liable to be set aside. Consequently, the original order dated March 2, 2022, and the appellate order dated August 1, 2023 were quashed. The petitioner was directed to file a reply to the show-cause notice within three weeks, and the adjudicating authority was instructed to conduct proceedings anew and pass an order after granting the petitioner an opportunity for a hearing.Conclusion:In conclusion, the High Court allowed the writ petition, setting aside both the cancellation of registration order and the appellate order under Section 107 of the Act. The petitioner was given the opportunity to respond to the show-cause notice, and the adjudicating authority was directed to re-examine the matter and pass a fresh order after providing a hearing.