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2021 Supreme(Raj) 802
IN THE HIGH COURT OF RAJASTHAN
Dinesh Mehta, J.
Avon Udhyog - Appellant
Versus
State Of Rajasthan & Ors. - Respondents
S.B. Civil Writ Petition No. 7463/2021
Decided on : 05-07-2021
Mr. Sharad Kothari, Advocate, for the Petitioner; Mr. Hemant Dutt, Advocate, for the Respondent
The central legal point established in the judgment is the requirement of granting a reasonable opportunity of hearing before suspending a license and the mandatory time frame for passing an order in case of suspension of registration.
Headnote:
Suspension of Registration - Rajasthan Goods and Service Tax Act, 2017 - Section 29, Rules 21 and 22 - The court discussed the provisions of Section 29 of the Rajasthan Goods and Service Tax Act, 2017, and Rules 21 and 22, particularly emphasizing the requirement of granting a reasonable opportunity of hearing before suspending a license and the mandatory time frame for passing an order in case of suspension of registration.
Fact of the Case:
The petitioner challenged the suspension of their registration certificate due to a search conducted on their premises, arguing that the authorities failed to pass a final order regarding the registration, keeping their right to trade in suspended animation.
Finding of the Court:
The court directed the petitioner to put forth all submissions and appear before the respondent to provide an opportunity of hearing, emphasizing that the proceedings of cancellation of registration cannot be kept hanging fire on any pretext.
Issues: The issues revolved around the suspension of the petitioner's registration certificate, the requirement of a reasonable opportunity of hearing, and the time frame for passing an order in case of suspension of registration.
Ratio Decidendi: The court emphasized the requirement of granting a reasonable opportunity of hearing before suspending a license and the mandatory time frame for passing an order in case of suspension of registration, and directed the petitioner to appear before the respondent for a hearing.
Final Decision: The court disposed of the writ petition with a direction to the petitioner to appear before the respondent for a hearing and reserved the right to take up legal remedies against the order passed by the respondent.
JUDGMENT
1. By way of present writ petition, petitioner has challenged notice-cum-order dated 04.02.2021, vide which, petitioner's registration certificate has been suspended.
2. Informing the requisite facts of the case, Mr. Sharad Kothari, learned counsel for the petitioner, stated that a search was conducted on petitioner's premises on 03.02.2021, in furtherance whereof, respondent No.4 issued a notice dated 04.02.2021, proposing to cancel petitioner's registration certificate.
3. Simultaneous with the notice proposing to cancel the registration, the respondent No.4, with the same stroke of pen, kept his registration certificate under suspension with immediate effect.
4. Learned counsel for the petitioner, submitted that pursuant to the notice of cancellation of registration dated 04.02.2021, petitioner has furnished his detailed reply/ response on 20.03.2021, yet the respondents have not passed any final order regarding petitioner's registration, due to which petitioner's right to trade has been kept in suspended animation.
5. Inviting Court's attention towards the provisions contained in Section 29 of the Rajasthan Goods and Service Tax Act, 2017, amended vide Finance Act, 2020 and Rules 21 and 22 of the Rules framed thereunder, Mr. Kothari, learned counsel for the petitioner, submitted that though suspension of registration certificate does not envisage grant of opportunity of hearing in express terms, but the principles of natural justice warrants that before suspending a license, a reasonable opportunity of hearing must be granted to an assessee.
6. He submitted in the alternative, that the Assessing Authority is required to take a final decision pursuant to notice of cancellation of registration at the earliest, so that a businessman's fundamental rights enshrined and guaranteed under Article 19(1)(g) of the Constitution of India are not kept in abeyance on account of suspension of registration.
7. Mr. Kothari, learned counsel for the petitioner, invited Court's attention towards various provisions of the Rules of 2017, more particulalry, Rule 22(3) of the Rules and submitted that on expiry of 30 days, the order of suspension of registration of the petitioner automatically comes to an end because Rule 22(3) mandates an order of cancellation to be passed within 30 days.
8. Mr. Hemant Dutt, learned counsel for the respondents, submitted that petitioner, who was required to file reply to the notice within a period of 7 days, has failed to file reply within the stipulated time and the same came to be filed as late as on 20.03.2021. Hence, the petitioner cannot raise a grievance and level allegation of protraction of the proceedings by the respondent Assessing Authority.
9. Heard.
10. Sub-rule (3) of Rule 22 reads thus:-
"22.- Cancellation of registration (1) XXX XXX (2) XXX XXX (3) Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1) or under sub- rule (2A) of rule 21A, cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of Section 29."
11. A perusal of above quoted sub-rule (3) clearly shows that the authority concerned is required to cancel the registration (if required) within a period of 30 days of the date of the reply to the show cause notice. True it is, that the petitioner did not file reply by 15.02.2021, as was required by the notice dated 04.02.2021, but then the notice dated 04.02.2021, requiring the petitioner- assessee to file reply within 7 days from the date of service of the notice itself was contrary t
