TaxTMI 
TaxTMI 
2026 (4) TMI 781
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....ia, and is issued wholly without and/or in excess of jurisdiction. b) issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof quash and set aside the Impugned Order-1 dated 22.08.2024 and Impugned Order-2 dated 10.10.2024 passed by the Respondent No. 1 (Exhibit "A" & "B"); c) issue a Writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India, directing the Respondent No. 3: (i) to set-aside the Impugned Order-1 dated 24.08.2024 Impugned Order-2 dated 10.10.2024 passed by the Respondent No. 2, which is at Exhibit - "A" & "B" to the present Petition; and/or (ii) to direct the Respondents to restore the Petitioner's registration from the date of cancellation of registration, i.e., 16.03.2023." 3. The primary grievance of the Petitioner is in respect of the cancellation of the Goods and Services Tax (GST) registration of the Petitioner by an order dated 22nd Augu....
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.... GST registration of the Petitioner should not be cancelled, inasmuch as the Petitioner was genuinely carrying on business from the principal place of business registered under GST, and it was only on account of the ill-health of the proprietor Mr. Ghosebasha that temporarily the business was at a standstill. The representative of the Petitioner proprietor submitted that the same did not warrant cancellation of the GST registration, and hence requested that the same should not be suspended. vi However, without considering the submissions made on behalf of the Petitioner, Respondent No. 3 passed the impugned order dated 22nd August 2024, on the ground that the Petitioner firm was non-operational, as no business activities were found to be carried out at the registered address of the principal place of the business of the Petitioner. The registration of the Petitioner was therefore cancelled under Section 29(a) of the CGST Act read with Rule 21(a) of the CGST Rules. The Petitioner thereafter applied for revocation of the aforesaid cancellation of the GST registration and also submitted the requisite documents. However, the same were not considered and another show-cause noti....
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....d by Respondent No. 3. 7. Having heard learned Counsel for the parties, we are of the opinion that there is much substance in the contention as urged on behalf of the Petitioner that the cancellation of the registration in the facts of the present case was arbitrary, and further that the show-cause notices and the impugned orders have not taken into consideration or rendered any findings in respect of the submissions made by the Petitioner. It is our view this was a genuine case where the ill-health of the proprietor of the Petitioner concern Mr. Ghosebasha, suffering from chronic kidney disease, was not considered by the Respondents, which resulted in the temporary discontinuance of the business, and therefore the action of the Respondents in cancelling the registration is high-handed and arbitrary. 8. It is evident that neither the impugned orders, nor the show-cause notices contain any discussion or reasoning as to why the Petitioner's registration has been cancelled. In our view, the same appear to have been passed mechanically and in a standardised manner, without any application of mind on part of the Respondents. 9. In light of the above, we are of the considered op....
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.... 16. In the aforesaid circumstances, we are of the clear opinion that the petitioner would be justified in placing reliance on the decision of this Court in Monit Trading Pvt. Ltd. (supra) in which in identical circumstances and being confronted with a similar show cause notice, the action on the part of the department was set aside. The relevant observations which are apt in the present case are required to be noted, which reads thus: "10. This apart there is quite casualness in the appellate authority discharging its statutory jurisdiction, inasmuch as the documents as submitted by the petitioner as permitted to be submitted by orders dated 6 January, 2022 passed by the Division Bench of this Court are not bothered to be referred, much less discussed or any reasons attributed on these document, in recording a blanket conclusion as set out in paragraph 13(D) of the impugned order, that the company was found non-existent and no books of accounts, physical or electronic form, were found maintained at the principal place of business. As pointed out on behalf of the petitioner, all the necessary books which were available with the petitioner were submitted, which we have ....
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....ted 31 January, 2022; and thirdly, of the Joint Commissioner (Appeals-II), CGST and Central Excise, Mumbai who passed the impugned orders on the petitioner's appeal. 13. We would normally not make such observations, however, in our opinion, the present case is gross. It has surpassed all canons of fairness, reasonableness and the bounden duty of these officers to act in accordance with law. Such officers in their public position wield drastic powers which are conferred on them by law, however, such powers are coupled with a onerous duty and obligation to be exercised strictly in accordance with law and in no other manner, much less recklessly. As observed above, each of these officers have deviated in adhering to such basic principles in the jurisdiction which they were empowered to exercise as conferred by law. In fact, on the edifice of a patently illegal show cause notice, the consequence of which appeared to be predetermined, the first authority proceeded to pass an order against the petitioner cancelling its registration. If the elementary principles of law of adherence to the principles of natural justice, in regard to issuance and adjudication of show cause noti....
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....ce and the impugned order suffered from an incurable defect which compels us to exercise the discretionary jurisdiction under Article 226 of the Constitution of India to quash and set aside the show cause notice as also the impugned order based on such illegal show cause notice. 10. ...... 11. Before parting, we need to make some observations. We may note that the case of the department is that there is substantial revenue involved in the present case which may be deprived to the public exchequer and by conduct which is also attributable to the petitioner. According to the respondents, there was a modus operandi on the part of the petitioner to generate and claim fake ITC. If what is stated on behalf of the revenue is to be believed to be correct, in such event, the designated officer should have been more careful and could not have been so careless in issuing such defective show cause notice. The impugned action in issuing such show cause notice and passing of the impugned order thereon, has in fact proved counter-productive to the interest of revenue, if the department is correct in its case as put up in the reply affidavit for the first time. The concerned Comm....
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.... in paragraph 13(D) of the impugned order, that the company was found non-existent and no books of accounts, physical or electronic form, were found maintained at the principal place of business. As pointed out on behalf of the petitioner all the necessary books which were available with the petitioner were submitted, which we have noted above. There is not a whisper of reference to such material in the impugned order passed by the appellate authority. This apart even in regard to the premises of the petitioner, the petitioner had furnished documents and reasons on the rental agreement it had with the sister concern M/s. Kayavlon Impex Pvt. Ltd. The appellate authority nowhere refers as to why such rental agreement would be not acceptable for the petitioner to occupy the premises much less under any rule. The appellate authority is certainly not an authority which would have any jurisdiction which any forums under the Rent Act or under the Companies Act would exercise to comment on the nature of the said agreement. Thus, in our opinion the reasons as set out by the appellate authority in confirming the order passed by the Assistant Commissioner are ex facie untenable. At no point o....
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....ntly illegal show cause notice, the consequence of which appeared to be predetermined, the first authority proceeded to pass an order against the petitioner cancelling its registration. If the elementary principles of law of adherence to the principles of natural justice, in regard to issuance and adjudication of show cause notices are not being followed by such authorities, the fate of the citizens at the hands of the authorities, is just to be imagined. This is one case which in our opinion is an eye opener. Certainly, the orders passed by these authorities have resulted in civil consequences. It has directly affected the rights of the petitioner guaranteed under Articles 19(1) (g) and 300A of the Constitution. We may observe that in a given case the conduct of the assessee may be howsoever in breach of the rules and law, but that does not mean that the authorities who are to act under law could have powers to throw to the wind all cannons of fairness, non arbitrariness and discard the lawful procedure required to be followed by them in any administrative adjudication. At all material times, such authorities would be required to act in strict adherence to the rule of law in passi....