2024 (9) TMI 1580 - HC - GST

Tax Registration Cancellation Overturned for Lack of Reasoning; Fresh Hearing Ordered to Ensure Fairness.

M/s Shiv Kumar Sanjeev Kumar Versus The State of U.P. And Another

M/s Shiv Kumar Sanjeev Kumar Versus The State of U.P. And Another - 2024:AHC:155038 - DB Issues:Challenge to order for cancellation of registration under Article 226 of the Constitution of India without application of mind; Lack of reasons in the order leading to adverse effect on the right to run business; Compliance with Article 14 of the Constitution of India; Doctrine of merger in appeal not applicable; Necessity of indicating reasons in administrative or quasi-judicial orders.Analysis:The judgment by the High Court of Allahabad, delivered by Hon'ble Shekhar B. Saraf and Hon'ble Manjive Shukla JJ., pertains to a writ petition challenging the cancellation of registration order dated February 16, 2023, passed by the Assistant Commissioner, Sector-3, State Tax, Etawah. The petitioner contended that the cancellation order was devoid of any application of mind, as evidenced by conflicting statements in the order regarding the submission of a reply. Citing a Division Bench judgment in a similar case, the petitioner argued that the cancellation order lacked reasoning, which is essential for quasi-judicial decisions affecting business rights under Article 19 of the Constitution of India and compliance with Article 14. The petitioner also relied on a previous judgment emphasizing the importance of providing reasons in administrative or quasi-judicial orders.In the Division Bench judgment referred to by the petitioner, it was highlighted that even if an appeal is time-barred, the original order must be reasoned, and the petitioner should be allowed to respond to the show-cause notice. Based on this precedent, the High Court concluded that the impugned cancellation order lacked justification and set it 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 issue a new order after considering the petitioner's defense.The High Court's decision was grounded in the principles of fairness and due process, emphasizing the significance of providing reasons in administrative or quasi-judicial actions to safeguard the rights of individuals and ensure compliance with constitutional provisions. By quashing the cancellation order and ordering a fresh adjudication with proper opportunity for the petitioner to present their case, the court upheld the rule of law and the right to a fair administrative process.Overall, the judgment underscores the importance of procedural fairness and the requirement for administrative and quasi-judicial authorities to provide reasoned decisions that adhere to constitutional principles, thereby protecting the fundamental rights of individuals and ensuring the integrity of the legal system.