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2023 Supreme(All) 2303
IN THE HIGH COURT OF ALLAHABAD
VIVEK CHAUDHARY, MANISH KUMAR, JJ.
M/s Makewell Pharma Gomti Nagar Lucknow - Petitioner
Versus
State of U.P. And Another - Respondents
WRIT TAX NO. - 207 OF 2023.
Decided On : 16-10-2023
For the Petitioner: Anurag Mishra.
For the Respondents: C.S.C.
Important Points
Subject
Taxation - Goods and Services Tax
Act Referred
Headnote
(B) Quasi-Judicial Authority - The principles of natural justice mandate that authorities must provide reasons for their orders, and an order lacking reasons cannot withstand legal scrutiny. (Paras 6, 7).
Facts of the case:
The petitioner, a proprietorship engaged in civil contracting, had his GST registration cancelled after failing to respond to a show-cause notice issued for non-filing of GST returns, compounded by the COVID-19 pandemic.
Findings of Court:
The court recognized the absence of reasoning in the cancellation order as a violation of Article 14, leading to the order's invalidation. The petitioner was allowed to reply to the notice and was entitled to a fresh hearing.
Issues: Whether the cancellation order violated principles of natural justice and statute due to lack of reasoning as prescribed for quasi-judicial orders.
Ratio Decidendi: The court ruled that a cancellation order devoid of reasons is unlawful and that quasi-judicial actions must be substantiated with reasons to ensure fairness, thereby violating the Constitution’s guarantee of rights (Articles 14 and 19).
Result: The impugned order dated 23.12.2022 is set aside.
| Table of Content |
|---|
| 1. petition filed against registration cancellation. (Para 2 , 3 , 4) |
| 2. arguments against cancellation order's lack of reasoning. (Para 5 , 6) |
| 3. impugned order lacks application of mind. (Para 7) |
| 4. petition allowed; order set aside. (Para 8 , 9) |
JUDGMENT
Heard Sri Pranjal Shukla, learned counsel for the petitioner and learned Standing Counsel for the State.
2. Present petition has been filed challenging the order dated 23.12.2022 passed by the Superintendent, Sector- 20, Lucknow i.e. respondent no. 3, whereby the registration of the petitioner was cancelled.
3. The facts, in brief, are that the petitioner is a proprietorship concern engaged in civil contractual works and was registered under the GST Act. It appears that as the GST returns was not filed by the counsel, a show-cause notice dated 09.11.2022 was served. In the said show-cause notice, the reasons as prescribed were as under:
"Whereas on the basis of information which has come to my notice, it appears that your registration is liable to be cancelled for the following reasons:
1. returns furnished by you under Section 39 of the Central Goods and Services Tax Act, 2017.
Observations
Failure to furnish returns for a continuous period of six months
You are hereby directed to furnish a reply to the notice within thirty days from the date of service of this notice.
You are hereby directed to appear before the undersigned on 08/12/2022 at 11:00
If you fail to furnish a reply within the stipulated date or fail to appear for personal hearing on the appointed date and time, the case will be decided ex parte on the basis of available records and on merits.
Please note that your registration stands suspended with effect from 09.11.2022."
4. The case of the petitioner is that the petitioner did not have knowledge of the show-cause notice on account of COVID-19 upsurge, thus, the reply could not be filed and an order came to be passed on 23.12.2022 (Annexure - 3) whereby registration was cancelled. The gist of the cancellation order is reproduced herein below:
| "Reference Number:ZA091222184601P | Dated: 23.12.2022 |
Dated: 23.12.2022
To
Saurabh Kumar Singh
CP-1 Vijay Tower,Vijay Tower Vastu Khand Gomti Nagar, Lucknow, Lucknow, Uttar Pradesh 226010
| Application Reference No. (ARN): AA091122038401R | Dated: 08/11/2022 |
Order for Cancellation of Registration
This has reference to your reply dated 09.12.2022 in response to the notice to show cause dated 08/11/2022.
Whereas the undersigned has examined your reply and submissions made at the time of hearing, and is of the opinion that your registration is liable to be cancelled for following reason(s).
1. No Response.
The effective date of cancellation of your registration is 23/12/2022
Determination of amount payable pursuant to cancellation:
Accordingly, the amount payable by you and the computation and basis thereof is as follows:
The amounts determined as being payable above are without prejudice to any amount that may be found to be payable you on submission of final return furnished by you.
You are required to pay the following amounts on or before 17.01.2023 failing which the amount will be recovered in accordance with the provisions of the Act and rules made thereunder.
| Head | Central Tax | State Tax/UT Tax | Integrated Tax | Cess |
| Tax | 0 | 0 | 0 | 0 |
| Interest | 0 | 0 | 0 | 0 |
| Penalty | 0 | 0 | 0 | 0 |
| Others | 0 | 0 | 0 | 0 |
| Total | 0.0 | 0.0 | 0.0 | 0.0 |
Place: Range-IV
Date: 23/12/2022
Vikas Kapoor
Superintendent
Lucknow Sector-20"
5. Learned counsel for the petitioner argues that although no fault can be found with the appellate order dismissing the appeal as Appellate Authority does not have the power to condone the delay in terms of the scheme of the Act, however, he argues that the order cancelling the registration is without application of mind; he draws my attention to the impugned order dated 23.12.2022, which does not disclose any applicati
