Quasi-judicial orders must provide clear reasoning; failure to do so renders them invalid, as seen in the cancellation of GST registration.

JUDGMENT

Mr. G.S.Sandhawalia, J. (Oral) -

The challenge in the present writ petition filed under Articles 226 and 227 of the Constitution of India is to the orders dated 09.04.2022 (Annexure P-8) whereby GST registration of the petitioner has been cancelled which was granted on 25.08.2018 in Form GST REG-06 under Rule 10(1) (Annexure P-4). The Principal Place of Business (PPOB) was shown as B-8, GF-03, Gupta Enterprises, Nirmal Chhaya Tower, VIP Road, Zirakpur, Mohali, SAS Nagar, Punjab, 140603. The petitioner had been put to notice that the registration was liable to be cancelled as there were discrepancies noticed while conducting physical verification and the petitioner was asked to put in appearance on 22.03.2022 vide notice dated 14.03.2022 (Annexure P- 7).

2. Notice of motion.

3. Mr. Saurabh Kapoor, Addl. A.G., Punjab accepts notice.

4. Keeping in view that the orders arise out of quasi judicial action of the respondents, we are of the considered opinion that no reply is necessary in the peculiar facts and circumstances.

5. It is the case of the petitioner that it had filed the necessary reply wherein, it has specifically mentioned that the application for GST number in Punjab was for the work of Extension of TMS by 24 meters at Diesel Loco Moderization Works, Patiala, Punjab and the address was of the brother of the partner. The said partnership firm was stated to be a registered government contractor enlisted as Class-I with CPWD having registered office at 252-G, Sant Nagar, East of Kailash, New Delhi and it was mentioned that they apply for GST registration in a particular State after award of work on the basis of letter of intent by the client. The justification given as such regarding the discrepancy noticed by the authority was that when the renovation of the house was going on, the workers had taken off the GST name board from wall and now it stands restored and refixed. Therefore, an assurance had been given that they would be more careful in future. The work in Punjab had been completed on 31.03.2021 and thereafter no work had been obtained and it was submitted that they were regularly filing the return as NIL.

6. Counsel has also brought to our notice that the necessary proof of renovation as such was appended alongwith other documents before the authorities whereby it showed that plumbing work was going on by a labour contractor apart from other civil works at the said site. The said documents have been stated to have been filed alongwith the reply. Vide order dated 09.04.2022 (Annexure P-8) by passing a cryptic non-speaking order, the cancellation was done on the ground that the reply has been examined and submissions made at the time of hearing and, therefore, the tax payer had been found non-existent.

7. We are of the considered opinion that firstly the principal order passed was non-speaking as such and would fall foul of the observations made by the Apex Court in M/s. Kranti Associates Pvt. Ltd. v. Sh. Masood Ahmed Khan and others, (2010) 9 SCC 496 since no valid reasons have been given and neither the fact that any renovation has been carried out has been properly examined, as noticed above.

8. The petitioner thereafter filed an application under Section 30 of the CGST Act, 2017 for revocation pleading the said ground that the reply was not properly considered. Vide the order dated 29.06.2022 (Annexure P- 12), which is also subject matter of challenge, the said revocation application was dismissed under Section 30 read with Rule 23 of the CGST Rules, 2017 by observing that the JRO report did not show any sign of renovation at the time of physical verification and the tax payer had also failed to appear for personal/physical hearing. The petitioner filed an appeal which was dismissed vide order dated 27.09.2023 (Annexure P-18) by taking the adverse view that since the appellants had admitted that they did not any work in the State of Punjab after 31.03.2021 and, therefore, they were not working at the PPOB