Tax Registration Cancellation Overturned: Procedural Flaws Expose Lack of Reasoned Decision-Making in Administrative Order

The HC allowed the writ petition challenging tax registration cancellation. The court found procedural irregularities in the original and appellate orders, noting internal contradictions and lack of reasoned decision-making. The HC set aside both orders, directing the petitioner to file a reply to the show cause notice within three weeks and the adjudicating authority to conduct fresh proceedings with proper hearing.

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Issues involved: Challenge to order for cancellation of registration u/s 107 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Summary:
The petitioner challenged the order for cancellation of registration dated October 10, 2022, and the appellate order dated March 19, 2024, u/s 107 of the Uttar Pradesh Goods and Services Tax Act, 2017. The petitioner contended 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 noted similarities with a previous case and set aside the impugned orders, directing the petitioner to file a reply to the show cause notice and the adjudicating authority to pass a fresh order after granting an opportunity of hearing.

In the first line, the order stated that a reply was filed by the petitioner on September 30, 2022, whereas the second line recorded that no reply was submitted, indicating a lack of proper consideration. The court referred to previous judgments highlighting the necessity of reasons in administrative or quasi-judicial orders. It was observed that the impugned order lacked reasoning for the harsh action of cancellation of registration, leading to a violation of Article 14 of the Constitution of India. Consequently, the order dated 07.01.2023 was set aside, and the petitioner was directed to file a reply to the show cause notice within three weeks.

The court emphasized the importance of providing reasons in judicial proceedings, as seen in previous judgments. Drawing parallels with a similar case, the court concluded that the impugned orders were liable to be set aside. Accordingly, the order in original dated October 10, 2022, and the appellate order dated March 19, 2024, were quashed. The petitioner was instructed to file a reply to the show cause notice within three weeks, and the adjudicating authority was directed to conduct proceedings afresh and pass an order after providing an opportunity of hearing to the petitioner. Ultimately, the writ petition was allowed with the aforementioned directions.

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