2024 (4) TMI 773 - HC - GST

GST Registration Cancellation Order Invalidated for Insufficient Reasoning and Contradictory Statements Under Section 29

M/s Jawahar Chemist Versus State of UP And 2 Others

HC found registration cancellation order under UP GST Act invalid due to lack of application of mind. The order contained contradictory statements and ... Validity Of order in original - passed without any application of mind - Cancellation of registration of petitioner - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh [2023 (8) TMI 1262 - ALLAHABAD HIGH COURT], wherein the appeal was barred by time u/s 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case (supra) 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. Thus, the orders impugned herein are liable to be set aside. Accordingly, the order in original dated February 21, 2023 and the appellate order dated February 21, 2024 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. With the above directions, the writ petition is allowed. Issues involved: Challenge to the order for cancellation of registration u/s 107 of the Uttar Pradesh Goods and Services Tax Act, 2017 due to lack of application of mind and absence of reasons in the original order.Details of the Judgment:Issue 1: Lack of Application of Mind in Cancellation of Registration OrderThe petitioner challenged the cancellation of registration order, arguing that it was passed without proper application of mind. The petitioner pointed out discrepancies in the order, where it mentioned both the submission and non-submission of a reply by the petitioner. Citing a Division Bench judgment, it was contended that the cancellation order lacked reasoning and adversely affected the petitioner's right to conduct business under Article 19 of the Constitution of India. The Court emphasized the importance of providing reasons in administrative or quasi-judicial orders, as highlighted in previous judgments. Consequently, the Court set aside the cancellation order and directed the petitioner to file a reply to the show-cause notice for a fresh decision by the Adjudicating Authority.Issue 2: Absence of Reasons in Judicial ProceedingsThe petitioner relied on a previous judgment to stress the significance of providing reasons in judicial proceedings. Drawing parallels to a similar case, the Court noted that the lack of reasoning in the cancellation order rendered it non-compliant with Article 14 of the Constitution of India. In line with the precedents, the Court quashed the original and appellate orders, instructing the petitioner to respond to the show-cause notice within three weeks for a fresh decision by the adjudicating authority.In conclusion, the High Court allowed the writ petition, setting aside the impugned orders and directing a fresh consideration of the matter with proper adherence to legal principles and procedural requirements.