Tax Registration Cancellation Order Invalidated Due to Procedural Flaws and Lack of Reasoned Decision-Making

HC found procedural irregularities in tax registration cancellation order. The court identified inconsistent statements and lack of reasoned decision-making. Order was set aside, directing petitioner to respond to show-cause notice within three weeks. Adjudicating authority must provide reasoned order complying with constitutional principles of natural justice and fair hearing.

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

Cancellation of Registration:
The petitioners challenged the order for cancellation of registration dated 06.04.2023 and the order dated 07.02.2023 passed in appeal u/s 107 of the Act. The petitioner argued that the cancellation order was passed without proper application of mind. The court noted discrepancies in the order where it stated a reply was filed by the petitioner on November 8, 2022, but also mentioned that no reply was submitted. Relying on previous judgments, the court emphasized the importance of providing reasons in judicial proceedings. The court found that the cancellation order lacked reasoning and did not satisfy the test of Article 14 of the Constitution of India. Consequently, the impugned 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 for a fresh decision by the Adjudicating Authority.

Lack of Application of Mind:
The court highlighted that the cancellation of registration order was without any application of mind, which is against the intent of the Act and not in compliance with the mandate of Article 14 of the Constitution of India. Referring to previous judgments, the court stressed that every administrative or quasi-judicial authority should provide reasons as they are essential for any judicial or administrative order. The court set aside the orders dated 07.02.2023 and 06.04.2024, directing the petitioner to respond to the show-cause notice within three weeks for a fresh decision by the adjudicating authority after granting an opportunity for a hearing.

Conclusion:
In conclusion, the High Court quashed the orders for cancellation of registration and lack of application of mind, directing the petitioner to file a reply to the show-cause notice within three weeks for a fresh decision by the adjudicating authority. The writ petition was allowed with these directions.

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