2026 (5) TMI 1730

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....siness of construction works in Assam. The partnership firm got it registered under the provisions of the Central Goods and Services Tax [CGST] Act, 2017. It is stated that when the partnership firm, having three partners, applied for registration, it was issued a Registration Certificate on 19.09.2017 in Form GST REG-06 with Registration no. 18AADFI6371D1ZG with 01.07.2017 as the date of liability. The partnership firm has its principal place of business at 9, R.G.B. Road, Nabin Nagar, Guwahati, Kamrup Metropolitan District, Pin - 781024, Assam. 3. The petitioner firm was issued the Show Cause Notice on 05.02.2024 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. The petitioner was thereby, asked to furnish a Reply within thirty 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 04.03.2024. It was further mentioned that if the petitioner would fail to furnish a Reply within the stipulated date or would fail to appear for personal hearing on the appointed date and time, the case would be decided ex-parte on the bas....

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.... 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 manner of furnishing of return electronically through the common porta....

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....G-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 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 05.02.2024 mentioned about Rule 22[1] / Rule 21A. 13. Sub-rule [1] of Rule 22 of the CGST Rules has inter-alia prescribed that where the Proper Officer....

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....s liable to be cancelled without detailing out the alleged default committed by the noticee, falls short of the requirement of affording an effective opportunity. By the Show Cause Notice, the petitioner was also directed to appear before the Proper Officer at 11-00 on 04.03.2024. 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 05.02.2024 and the contents of the impugned Order dated 08.03.2024 are read together, it is found that by the Order dated 08.03.2024, the Proper Officer while cancelling the GST Registration of the petitioner w.e.f. 08.03.2024, has not assigned any reason. The Proper Officer in the Order dated 08.03.2024 has recorded that 'This has reference to the show cause dated 05.02.2024. Whereas, no reply to the show cause notice has been submitted; and whereas, the undersigned based on record available with this office is of the opinion that your registration is liable to be c....

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.... proper reason by the concerned authority, then the order is a non-speaking one. Non-speaking order is one which does not provide a clear reason for its decision. The fact that the petitioner-assessee did not submit any Reply to the Show Cause Notice dated 05.02.2024 or did not appear before the Proper Officer, when he was called upon to do so, does not absolve the Proper Officer from the obligation of passing a speaking order as any order which brings adverse consequence to a person cannot be a mere paper formality. 23. An adjudicating authority exercising statutory power of cancelling registration under the CGST Act must record reasons for its decision, if such obligation is not expressly or impliedly dispensed with. It is implicit in the principles of natural justice and fair play that 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 ....