Tax Registration Cancellation Overturned: Authority Ordered to Reconsider Case with Proper Reasoning and Fair Hearing

HC allowed the writ petition challenging tax registration cancellation. The court found both original and appellate orders deficient in reasoning and application of mind. HC directed the petitioner to file a reply to the show cause notice within three weeks and ordered the tax authority to pass a fresh order after providing a proper hearing opportunity.

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Issues involved:
The issues involved in this case are the cancellation of registration under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017, and the lack of application of mind in passing the original and appellate orders.

Cancellation of Registration:
The petitioner challenged the order for cancellation of registration dated March 18, 2021, passed by respondent No.4 and the appellate order dated May 24, 2023, passed by respondent No.3 under Section 107 of the Act. The petitioner contended that the cancellation was done without proper application of mind, as evident from the lack of reasons provided in the orders. The petitioner relied on previous judgments emphasizing the importance of providing reasons in judicial proceedings. The court found that the orders lacked reasoning and set them aside, directing the petitioner to file a reply to the show cause notice within three weeks and for the adjudicating authority to pass a fresh order after granting an opportunity of hearing.

Lack of Application of Mind:
The petitioner argued that the cancellation of registration was done without proper application of mind, violating the principles of natural justice and the rights guaranteed under the Constitution of India. The petitioner cited previous judgments highlighting the necessity of reasons in administrative or quasi-judicial orders. The court agreed with the petitioner, finding that the original and appellate orders lacked reasoning and were set aside. The court directed the petitioner to file a reply to the show cause notice within three weeks and for the adjudicating authority to pass a fresh order after providing an opportunity of hearing.

Conclusion:
In conclusion, the High Court of Allahabad set aside the original order for cancellation of registration dated March 18, 2021, and the appellate order dated May 24, 2023, due to the lack of application of mind and absence of reasons in the orders. The court directed the petitioner to respond to the show cause notice within three weeks and for the adjudicating authority to conduct proceedings afresh with proper consideration and opportunity for the petitioner to present their defense. The writ petition was allowed with these directions.

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