AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 161
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....e impugned Order of cancellation has been passed by the Proper Officer without due application of mind. 2. It is the case of the petitioner that he is a person from the Scheduled Tribe and has been carrying on his business in the name of his proprietorship firm, M/s AA Enterprise, represented by its sole proprietor. It carries on business of stationeries, book stall and executes Govt. supply orders and its principal place of business is Prem Nagar, Naharlagun, District - Papum Pare, Arunachal Pradesh. The petitioner got itself registered as a 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. 12BVXPA47924120 w.e.f. 27.12.2019 and the Registration Certificate to that effect was issued on 02.01.2020. 3. The petitioner was issued the Show Cause Notice on 16.01.2023 by the Proper Officer asking him to show cause as to why the registration issued to him under the CGST Act should not be cancelled due to failure on his part to furnish returns under Section 39 of the CGST Act....
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....GST REG-19 and the Proper Officer while cancelling a registered person's GST Registration, has to assign reasons for cancellation of registration. But, the impugned Order dated 27.05.2023 is not a speaking order, being bereft of any reason. 7. Mr. Kipa, learned 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 herself 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 ....
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...., interest or penalty including the amount liable to be paid under sub-section [5] of Section 29. [4] Where the reply furnished under sub-rule [2] or in response to the notice issued under sub-rule [2A] of Rule 21A is found to be satisfactory, the proper 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 completion of the proceedings for cancellation for registration under Rule 22, w....
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.... to appear before the Proper Officer at 11-00 [without mentioning a.m. or p.m.] on 13.02.2023. The Show Cause Notice further provided that if the petitioner as the noticee would fail to furnish a Reply within the stipulated date or fail to appear for personal 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 16.01.2023 and the contents of the impugned Order dated 27.05.2023 are read together, it is found that by the Order dated 27.05.2023, the Proper Officer while cancelling the GST Registration of the petitioner w.e.f. 15.01.2023, has not assigned any reason. The Proper Officer in the Order dated 27.05.2023 has recorded that: 'This has reference to show cause dated 15.01.2023. The effective date of cancellation of your registration is 15.01.2023'. 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 RE....
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....l as submissions made at the time of personal hearing and is of the opinion that your registration is liable to be cancelled for following reason[s]: i. ii. The effective date of cancellation of your registration is <<DD/MM/YYYY>>. 2. Kindly refer to the 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 <Name of the officer> Designation Jurisdiction. 20. 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....
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....t an adjudicating authority should record reasons as it is part of fair procedure, more particularly, when the decision is likely to affect the right of the person concerned. Recording of reason is also prima facie suggestive of conscious 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 the 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. 25. Thus, from every standpoint, the impugned Order dated 27.05.2023 is not a speaking order. As such, the impugned Order dated 27.05.2023 is found to be one which is passed without any application of mind. For the afore-stated reasons, the impugned Order dated 27.05.2023 cannot stand t....