TaxTMI 
TaxTMI 
2025 (4) TMI 504
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....titioners that the petitioner no. 1 is a sole proprietorship firm with the petitioner no. 2 as its proprietor, who carries on business with the trade name, M/s Lungphi Rankha Enterprise and its principal place of business at Kharsang, Changland, Arunachal Pradesh. The petitioner got himself registered as proprietorship firm under the Central Goods and Services Tax [CGST] Act, 2017 ['the CGST Act', for short]. It is stated that when the petitioner applied for registration, the petitioner was issued Registration Certificate in Form GST REG-06 with Registration no. 12ACGPL8980Q3ZT w.e.f. 02.01.2019. 3. The petitioner was issued the Show Cause Notice on 14.11.2023 by the Proper Officer asking him to show cause as to why the registration issued to it under the CGST Act should not be cancelled due to failure on its part to furnish returns for a continuous period of six months. The petitioner was thereby, asked to furnish a Reply within thirty working days from the date of service of the Show Cause Notice. The petitioner was also directed to appear before the Proper Officer at 11-00 on 11.12.2023. It was further mentioned that if the petitioner would fail to furnish a Reply within the ....
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....Standing Counsel, CGST for the all respondents has submitted that the default of not filing the returns for a continuous period of six months and more was clearly attributable to the petitioner and none else. He has further submitted that the petitioner did not either submit an application for revocation in time nor presented an appeal under Section 107, CGST Act in time and such facts go to demonstrate that the petitioner himself was indolent and not vigilant. 8. I have considered the submissions of the learned counsel for the parties and have also gone through the materials brought on record, apart from the relevant provisions of the CGST Act, 2017 and the CGST Rules, 2017 ['the CGST Rules', for short] on which the learned counsel for the parties have relied on. 9. Section 39[1] of the CGST Act inter-alia requires a registered person to furnish a return for every calendar month or part thereof, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Rule 61[1] of the CGST Rules has prescribed the Form and manne....
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....officer shall drop the proceedings and pass an order in FORM GST REG-20 : Provided that where the person instead of replying to the notice served under sub-rule [1] for contravention of the provisions contained in Clause [b] or Clause [c] of sub-section [2] of section 29, furnishes all the pending returns and makes full payment of the tax dues along with applicable interest and late fee, the proper officer shall drop the proceedings and pass an order in FORM GST REG-20. [5] The provisions of sub-rule [3] shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself. 12. Sub-rule [2] of Rule 21A of the CGST Rules has empowered the Proper Officer also to suspend the registration of a person with effect from a date to be determined by him, pending the completion of the proceedings for completion for cancellation for registration under Rule 22, where the Proper Officer has reasons to believe that the registration of the person is liable to be cancelled under Section 29 or under Rule 21. The Show Cause Notice dated 05.01.2021 was mentioned about Rule 21A. 13. Sub-rule [1] of Rule 22 ....
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.... hearing on the appointed date and time, the case would be decided ex-parte on the basis of available records and on merits. 17. When the contents of the Show Cause Notice dated 14.11.2023 and the contents of the impugned Order dated 20.12.2023 are read together, it is found that by the Order dated 20.12.2023, the Proper Officer while cancelling the GST Registration of the petitioner w.e.f. 20.12.2023, has not assigned any reason. The Proper Officer in the Order dated 20.12.2023 has recorded that 'This has reference to Show Cause Notice dated 13.11.2023. The effective date of cancellation of your registration is 20.12.2023' . 18. It has been laid down in sub-rule [3] of Rule 22 of the CGST Rules that the Officer has to pass an Order under Section 29[2] of the CGST Act read with Rule 22[3] of the CGST Rules in FORM GST REG-19. For ready reference, the contents of Form GST REG-19 are extracted hereinbelow :- FORM GST REG-19 Reference No................ Date .............. To Name Address GSTIN/UIN Application Reference Number [ARN] Order for Cancellation of Registration This has reference to show c....
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....supportive document[s] attached for case specific details. 3. It may be noted that a registered person furnishing return under sub-section [1] of section 39 of the CGST Act, 2017 is required to furnish a final return in FORM GSTR-10 within three months of the date of this order. 4. You are required to furnish all your pending returns. 5. It may be noted that the cancellation of registration shall not affect the liability to pay tax and other dues under this Act or to discharge any obligation under this Act or the rules made thereunder for any period prior to the date of cancellation whether or not such tax and other dues are determined or after the date of cancellation. Place : Date : Signature Designation Jurisdiction. 19. Under the GST regime a registered assessee is required to pay the statutory dues under the CGST Act or the SGST Act, as the case may be, or both. These statutory dues are required to be paid by all the assessees, who are registered under the GST regime, mandatorily. Such payments of statutory dues contribute towards the State Exchequer. If a taxable person like the petitio....
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....cious application of mind on the part of the authority. The obligation to record reasons is a possible check against arbitrary action on the part of the adjudicating authority invested with the statutory power to take a decision which is likely to affect the right of the person concerned. When the statute itself contains a prescription to record reasons in the decision, absence of reasons in the decision falls short of prescription and would be in violation of the prescription and thus, illegal. A look at FORM GST REG-19 also goes to substantiate that the Proper Officer is obligated to record his reason[s] for taking the action of cancellation of GST Registration. 24. Thus, from every standpoint, the impugned Order dated 20.12.2023 is not a speaking order. As such, the impugned Order dated 20.12.2023 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 20.12.2023 cannot stand the scrutiny of law and is liable to be set aside and quashed. 25. A submission has been made that the writ petition has been preferred with delay as the petitioner has filed the writ petition in March, 2025, that is, after more than o....