2024 (3) TMI 1163 - HC - GST

Procedural Fairness Prevails: GST Registration Cancellation Order Overturned Due to Inadequate Reasoning and Technical Dismissal

M/s Aryavart Agencies, Lucknow Thru. Proprietor Rajeev Uniyal Versus State of U.P. Thru. Prin. Secy. Ministry of Finance, Lko. And 2 Others

The SC reviewed a GST registration cancellation case involving procedural irregularities. The court found the appellate authority's order lacking reasoned ... Challenged the order of cancellation of registration - appeal preferred was dismissed on the ground of limitation - limitation of filing of an appeal - date of the order - HELD THAT:- The Counsel for the petitioner argues that the appeal has been dismissed as being beyond limitation as such the doctrine of merger would not apply and the petitioner is fair entitled to seek judicial review of the order dated 14.02.2023 on the ground that the same is non speaking order. This Court in M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India and others [2022 (9) TMI 1047 - ALLAHABAD HIGH COURT] had held that the order of cancellation of registration or any other order passed either on administrative or on judicial side is without any reason and prima facie, without application of mind, the same does not stand the test of scrutiny under Article 14 of the Constitution of India. Thus, following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed. Accordingly, the writ petition is allowed. The order dated 14.02.2023 is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of this order within three weeks from today. Issues:The issues involved in the judgment are the cancellation of registration under Section 29 of the Central Goods and Services Tax Act and the dismissal of the appeal by the appellate authority on the ground of limitation.Cancellation of Registration:The petitioner's registration was cancelled due to failure to furnish returns for a continuous period of six months under Section 39 of the CGST Act. The petitioner, who was unwell and had submitted papers to their counsel, failed to reply to the show cause notice. The appellate authority dismissed the appeal due to the counsel's non-appearance, leading to the cancellation of registration. The order for cancellation specified the amounts payable and the basis for the cancellation. The petitioner argued that the order was non-speaking and lacked application of mind, citing a previous judgment to support their case. The court, following the precedent, allowed the writ petition, setting aside the cancellation order.Dismissal of Appeal:The petitioner's appeal against the cancellation order was dismissed by the appellate authority on the ground of limitation, considering the starting point of limitation as the date of the order. The petitioner contended that the doctrine of merger did not apply due to the appeal being beyond limitation. The court, referring to a previous case, held that orders passed without reason and prima facie lack of application of mind do not stand the test of scrutiny under Article 14 of the Constitution of India. Consequently, the court allowed the writ petition, directing the petitioner to appear before the respondent with the necessary documents for a fresh order to be passed in accordance with the law.