2024 (5) TMI 549 - HC - GST

Court Overturns GST Registration Cancellation for Lacking Reasoning; Calls for Fresh Adjudication Within 3 Weeks.

Sarvashree Bala Ji Enterprises Versus State of U.P. And 2 Others

The HC set aside both the original cancellation order and the subsequent appellate order concerning the petitioner's GST registration. The orders were ... Cancellation of registration without any application of mind - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh's case [2023 (8) TMI 1262 - ALLAHABAD HIGH COURT], wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case 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. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated November 10, 2022 and the appellate order dated April 6, 2024 are quashed and set aside - Petition allowed. Issues Involved:The issues involved in this case are the challenge to the order for cancellation of registration and the subsequent appellate order passed under Section 107 of the Uttar Pradesh Goods and Services Tax Act, 2017.Cancellation of Registration Order:The petitioner challenged the cancellation of registration order, contending that it was passed without proper application of mind. The petitioner highlighted discrepancies in the order, where it was stated that a reply was filed on a certain date, but then mentioned that no reply was submitted. Reference was made to a Division Bench judgment emphasizing the necessity of providing reasons in judicial proceedings. The petitioner argued that the cancellation order lacked reasoning and adversely affected the right to run a business as guaranteed under Article 19 of the Constitution of India. It was further argued that the order did not comply with the mandate of Article 14 of the Constitution. Relying on previous judgments, it was contended that the cancellation order was without proper application of mind and lacked reasons, thus failing to meet the requirements of Article 14. Consequently, the impugned cancellation order was set aside, and the petitioner was directed to file a reply to the show-cause notice within three weeks for a fresh adjudication.Appellate Order:The petitioner also challenged the appellate order, drawing attention to a previous case where an appeal was dismissed due to a time bar but the original order was set aside for being non-reasoned. In this case, it was argued that the appellate order should also be set aside due to the lack of proper reasoning. The Court agreed that the impugned orders were liable to be set aside. Therefore, both the original cancellation order and the subsequent appellate order were quashed and set aside. The petitioner was directed to file a reply to the show-cause notice within three weeks, and the adjudicating authority was instructed to conduct a fresh hearing and pass a new order.Conclusion:In conclusion, the writ petition was allowed, and the impugned orders were set aside with directions for fresh adjudication. The Court emphasized the importance of providing reasons in judicial and administrative orders, ensuring compliance with constitutional mandates and principles of natural justice.