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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, NIRAL R. MEHTA, JJ.
Sajid Faridmohammed Rollwala – Petitioner
Versus
Superintendent and Another – Respondents
Special Civil Application No. 4388 of 2024
Decided On : 03-04-2024
Cancellation of Registration - Central Goods and Service Tax Act, 2017 - Section 29(2) - The court quashed and set aside the impugned order cancelling the registration and remanded the matter back to the Assessing Officer at the show cause notice stage. The registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer.
Fact of the Case:
The petitioner, a tour operator, had its registration cancelled due to non-filing of returns for a continuous period of six months. The petitioner's business was severely affected by the pandemic, leading to financial difficulties. The petitioner filed all outstanding returns and paid the entire liability, but the appeal was rejected on the ground of limitation.
Finding of the Court:
The court found that the order cancelling the registration lacked reasons and did not comply with the well-settled law. It remanded the matter back to the Assessing Officer at the show cause notice stage and suspended the petitioner's registration until the show-cause notice is decided.
Issues: Cancellation of registration due to non-filing of returns, impact of the pandemic on the petitioner's business, rejection of appeal on the ground of limitation, and compliance with the well-settled law regarding reasons for cancellation.
Ratio Decidendi: The court emphasized the importance of providing detailed reasons for cancellation of registration and the need for compliance with the principles of natural justice. It held that the impugned order lacked reasons and did not adhere to the well-settled law, leading to the quashing and setting aside of the order.
Final Decision: The petition was allowed in part by quashing and setting aside the impugned order and remanding the matter back to the Assessing Officer at the show cause notice stage. The registration of the petitioner shall remain suspended until the show-cause notice is decided by the Assessing Officer.
ORDER :
1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 25.1.2024 passed by the Commissioner (Appeals), Central GST, Appeal Commissionerate, Ahmedabad and the order dated 11.3.2020 passed by the Superintendent, Ghatak 16 under Section 29(2) of the Central Goods and Service Tax Act, 2017 (for short ‘the Act’) whereby the registration of the petitioner has been cancelled.
2. Brief facts of the case can be stated as under:
2.2 It is the case of the petitioner that initially, the petitioner has not hired any consultant and thus, the returns could not be filed from January, 2018 onwards.
2.3 A show cause notice dated 12.2.2020 under Rule 22 read with Section 29(2)(c) of the Act was issued to the petitioner to show cause as to why the registration of the petitioner should not be cancelled due to non-filing of return for a continuous period of six months. It is further the case of the petitioner that said show cause notice was received on the portal. However, the petitioner could not respond to the show cause notice and thus, the registration number of the petitioner was cancelled vide order dated 11.3.2022, with effect from the same date.
2.4 The total liability of the tax extended to the tune of Rs. 13,13,725/-. However, during the year 2020, due to the pandemic, the business of the petitioner was severely affected and the petitioner was in a financial crunch and thereby, the Appeal could not be filed within the time provided under Section 107(4) of the Act. However, the Appeal was preferred before the respondent No. 2 on 5.1.2024 under Section 107 of the Act.
2.5 That on 25.1.2024, a personal hearing was granted. The authorized representative on behalf of the petitioner appeared and stated that because of covid pandemic, the dues wee not paid and now, that they have engaged the consultant and would thereby be filing the return regularly. It was further pointed out by the petitioner that the petitioner had filed all the outstanding returns from January, 2018 till March, 2020 by paying requisite interest and requisite late fees and all the outstanding dues were paid on 27.1.2024, whereby, in all, a sum of Rs. 26,95,432/- was paid towards the dischargement of entire liability.
2.6 However, the respondent No. 2 vide order dated 25.1.2024 rejected the Appeal on the ground of limitation and thereby, confirmed the order impugned therein.
2.7 Being aggrieved and feeling dissatisfied by aforesaid, the petitioner has approached this Court by way of this petition under Article 226 of the Constitution of India, seeking following reliefs:
“(A) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions to quash and set aside order passed by the appellate authority dated 25.1.2024 (at Annexure-F) as well as order dated 11.3.2020 (at Annexure-C) cancelling the registration certificate of the petitioner as well as show cause notice dated 12.2.2020 (at Annexure-B).
(B) Your Lordships may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other writ, orders or directions, directing the respondents to forthwith restore the registration certificate of the petitioner.
(C) During the pendency and final disposal of the present petition, Your Lordships may be pleased to stay operation, implementation and execution of order passed by the appellate authority dated 25.1.2024 (Annexure-F) as well as the order dated 11.3.2020 (at Annexure-C) cancelling the registration certificate of the petitioner and further be pleased to direct the respondents to forthwith restore the registration certificate of the petitioner.
(D) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the p
The importance of providing detailed reasons for cancellation of registration and the need for compliance with the principles of natural justice.
Orders lacking reasoning do not meet constitutional scrutiny under Article 14, allowing for judicial review and the right to respond to show cause notices.
The obligation to provide a reasoned order and consider the mode of service and date of knowledge for appeal timelines is crucial in administrative decisions.
An order cancelling a registration under statutory provisions must be a speaking order, assigning specific reasons for the decision. The failure of an assessee to respond to a show cause notice does ....
Quasi-judicial orders must provide reasons and demonstrate application of mind to satisfy constitutional requirements.
The cancellation of GST Registration without providing reasons violates principles of natural justice and statutory requirements, rendering the order illegal.
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