GST registration cancellation quashed as arbitrary for ignoring proprietor's ill-health causing temporary business halt, issuing vague unreasoned show-cause notices, and passing mechanical orders without considering submissions, violating natural justice.

JUDGMENT :

(PER AARTI SATHE, J.)

1. Rule. Rule made returnable forthwith. Respondents waive service. By consent of the parties, heard finally.

2. This Petition under Article 226 of the Constitution of India is filed praying for the following substantive reliefs:-

“a) Declare that the Impugned Order-1 dated 22.08.2024 and Impugned Order-2 dated 10.10.2024 passed by the Respondent No. 2 (Exhibit "A" & "B" to the present Petition) - is perverse, is arbitrary, is passed in breach of principles of natural justice, is passed without proper application of mind, is ultra vires the provisions of Section 29 and 30 of the CGST Act read with corresponding rules made thereunder, is contrary to the rights and protections guaranteed under Articles 14, 21, 265 and 300A of the Constitution of India, 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 22^nd August 2024 bearing reference No. ZA270824172470F, and also the ex-parte order dated 10^th October 2024, rejecting the application for revocation of cancellation of GST registration bearing No. ZA271024071427N (hereinafter collectively referred to as “impugned orders”).

4. The facts in the present Petition lie in a narrow compass, which are as follows:-

i. The Petitioner is a proprietary concern, and the proprietor is one Mr. Ghosebasha, in the business of aggregating used plastic PET bottles from small vendors and supplying the same in bulk to its customers for recycling purposes. The Petitioner obtained the registration under the Central Goods and Services Tax Act, 2017 (CGST Act) bearing registration No. 27DWRPG8915E1Z4, effective from 16^th March 2023, and the same was approved by Respondent No. 2. The Petitioner was discharging the GST obligations by depositing tax.

ii. In the month of March 2024, Mr. Ghosebasha, the proprietor of the Petitioner concern was diagnosed with Stage V chronic kidney disease. Owing to the Petitioner’s proprietors’ deteriorating health condition, the Petitioner’s business became non-operational and came at a standstill. The Petitioner was unable to surrender its GST registration; however, his consultant duly filed the GST returns during the said time.

iii. Respondent No. 3 conducted a field visit at the premises of the Petitioner concern and on 29^th May 2024 reported that the Petitioner’s business was found to be non-operational, and as a consequence thereof, proceedings under Section 29 of the CGST Act for ab-initio cancellation of its GST registration were initiated.

iv. On 11^th June 2024, a show-cause notice of even date was issued to the P