IMPORTANT POINT
A cancellation of GST registration must be a speaking order, providing clear reasons for its decision, especially when it entails adverse civil consequences.

JUDGMENT :

MANISH CHOUDHURY, J.

The petitioner has approached this Court by the instant writ petition, preferred under Article 226 of the Constitution of India, on the premise that his GST Registration under the Central Goods and Services Tax [CGST] Act, 2017 has been cancelled by an Order dated 09.08.2020 pursuant to issuance of a Show Cause Notice dated 27.07.2020. The assail is made inter-alia on the grounds that the manner in which the GST Registration has been cancelled is arbitrary and the impugned Order of cancellation has been passed without due application of mind.

2. It is the case of the petitioner that he is the sole proprietor of a firm by the name, M/s JNK Enterprise and in order to carry out his business, he got himself registered as a dealer under the Central Goods and Services Tax [CGST] Act, 2017/Assam Goods and Services Tax [AGST] Act, 2017. It is stated that when the petitioner applied for registration, the petitioner was issued a Registration Certificate in Form GST 06 with Registration no. 18ATVPS2934D2Z6 w.e.f. 18.05.2018.

3. The petitioner was issued the Show Cause Notice on 27.07.2020 by the Proper Officer asking him to show cause as to why the Registration Certificate issued to him under the CGST Act should not be cancelled due to non-filing of returns for a continuous period of six months. The petitioner was thereby, directed to furnish a Reply to the Show Cause Notice within seven working days from the date of service of the Show Cause Notice. 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 basis of the materials available on record and on merits.

4. Thereafter on 09.08.2020, the impugned Order came to be passed whereby the petitioner’s GST Registration has been cancelled w.e.f. 09.08.2020.

5. In view of the issue raised in this writ petition, notice be issued. As all the parties are represented, the notice is made returnable immediately at the request of and with the consent of the learned counsel for the parties.

6. I have heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. K. Jain, learned counsel representing Mr. S.C. Keyal, learned Standing Counsel, CGST for all the respondents.

7. Mr. Mishra, learned counsel for the petitioner has submitted that pursuant to the Show Cause Notice, which was uploaded in the common portal, the petitioner could not submit his Reply due to reasons beyond his control. He has submitted that due to onset and continuance of Covid-19 pandemic, the petitioner could not submit the returns, required to be submitted under Section 39[1] of the CGST Act, during the relevant period for a continuous period of six months or more. Sufferance of huge financial loss during that period was the primary reason for not filing the returns in time. He has further submitted that as soon as the financial condition of the petitioner improved slightly, the petitioner submitted his returns up-to August, 2020, as allowed by the GST portal. Though the petitioner tried to submit an application for revocation, the GST portal did not allow submission of such application as the time-line of 270 days from the date of cancellation was already over by then. Similarly, the petitioner could not prefer an appeal due to expiry of the statutory period of limitation.

7.1. Mr. Mishra has submitted that the impugned Order of cancellation of GST Registration is to be passed in Form GST REG 19 and the proper officer while cancelling as assessee’s GST Registration, has to assign the reasons for cancellation of registration. But, the impugned Order dated 09.08.2020 is a non-speaking and cryptic one. Further, the Order mentioned about submission of a Reply by the petitioner on 06.08.2020 and also about his attending personal hearing, whereas, the petitioner did not submit any wri