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.

JUDGMENT :

1. Heard Shri Aditya Pandey, learned counsel for the petitioner and Shri Ravi Shankar Pandey, learned Additional Chief Standing Counsel for the respondents-State.

2. The GST registration of the petitioner was cancelled by order dated 14.03.2023. The appeal of the petitioner was dismissed by the appellate authority dated 18.08.2023.

3. The petitioner is aggrieved by the order dated 14.03.2023 and the order dated 18.08.2023 and has assailed the same in this writ petition.

4. The impugned order dated 14.03.2023 makes a cryptic finding to the effect that no reply to the show cause notice was submitted by the petitioner. The order thereafter cancels the GST registration of the petitioner without assigning any reason.

5. The order of cancellation of GST registration dated 14.03.2023 visits the petitioner with severe penal consequences. Even if the finding that no reply to the show cause notice was submitted is taken on its face value, the authority has to adhere its obligations in law to apply its mind to the facts of this case and render a speaking order. Failure to submit the reply to the show cause notice does not free the authority from its duty to apply its mind independently to the facts in the record and make a reasoned order while deciding the controversy. The authority of the first instance did not pass a reasoned order. This Court has set its face against the order of cancellation of GST registration by non-speaking orders.

6. Reference can profitably be made to the authorities in point. The judgment of this Court rendered on 22.09.2022 in M/s Chandra Sain, Sharda Nagar, Lucknow Thru. Its Proprietor Mr. Chandra Sain v. U.O.I. Thru. Secy. Ministry of Finance, New Delhi and others wherein Pankaj Bhatia, J. held as under:

"8. In the present case from the perusal of the order dated 13.02.2020, clearly there is no reason ascribed to take such a harsh action of cancellation of registration. In view of the order being without any application of mind, the same does not satisfy the test of Article 14 of the Constitution of India, as such, the impugned order dated 13.02.2020 (Annexure -2) is set aside. The petition is accordingly allowed.

9. It is, however, directed that the petitioner shall file reply to the show-cause notice within a period of three weeks from today. The Adjudicating Authority i.e. Assistant Commissioner, Lucknow shall proceed to pass fresh order after giving an opportunity of hearing to the petitioner and after considering whatever defence he may take."

7. The said judgement is squarely applicable to the facts of this case. The order of cancellation being devoid of reasons is in the teeth of the law laid down by this Court in M/s Chandra Sain (supra).

8. The narrative has also the benefit of the holding of the Madras High Court in M/s. Pearl and Co. v. The Commissioner of Commercial Taxes and another (W.P. (MD) No.19127 of 2022 and W.M.P. (MD) No.13962 of 2022), wherein the consequences of cancellation of registration of a dealer and the approach of the revenue while considering such matters was set out as follows:

"6.Considering the submission and perusal of the materials, this Court is of the view that restoring the registration would not cause any harm to the department on the other hand it would be beneficial for the state to earn revenue. Further, in the case of Tvl. Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and others (W.P.Nos. 25048, 25877, 12738 of 2021 etc.. batch), dated 31.01.2022. There some of the petitioner filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petit