Adjudicating authorities are mandated to record clear reasons when exercising powers that produce adverse civil consequences, such as registration cancellation. Any order devoid of such reasoning is legally defective as it indicates a failure of the application of mind and breaches fundamental principles of natural justice.

JUDGMENT :

MANISH CHOUDHURY, J.

1. 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 27.05.2023 pursuant to issuance of a Show Cause Notice dated 16.01.2023. 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 by the Proper Officer without due application of mind.

2. It is the case of the petitioner that he is a person from the Scheduled Tribe and has been carrying on his business in the name of his proprietorship firm, M/s AA Enterprise, represented by its sole proprietor. It carries on business of stationeries, book stall and executes Govt. supply orders and its principal place of business is Prem Nagar, Naharlagun, District – Papum Pare, Arunachal Pradesh. The petitioner got itself registered as a proprietorship firm under the Central Goods and Services Tax [CGST] Act, 2017 [‘the CGST Act’, for short]. It is stated that when the petitioner applied for registration, the petitioner was issued Registration Certificate in Form GST REG-06 with Registration no. 12BVXPA47924120 w.e.f. 27.12.2019 and the Registration Certificate to that effect was issued on 02.01.2020.

3. The petitioner was issued the Show Cause Notice on 16.01.2023 by the Proper Officer asking him to show cause as to why the registration issued to him under the CGST Act should not be cancelled due to failure on his part to furnish returns under Section 39 of the CGST Act for a continuous period of six months. The petitioner was thereby, asked to furnish a Reply within thirty working days from the date of service of the Show Cause Notice. The petitioner was also directed to appear before the Proper Officer at 11-00 on 13.02.2023. It was further mentioned that if the petitioner would fail to furnish a Reply within the stipulated date or to appear for personal hearing on the appointed date and time, the case would be decided ex-parte on the basis of the available records and on merits. By the Show Cause Notice, the petitioner’s Registration under the CGST Act was also suspended w.e.f. 16.01.2023.

4. Thereafter on 27.05.2023, the impugned Order came to be passed whereby the petitioner’s GST Registration has been cancelled w.e.f. 15.01.2023.

5. I have heard Mr. H. Aape, learned counsel for the petitioner; Ms. O. Jerang, learned counsel on behalf of Mr. M. Kato, learned Deputy Solicitor General of India [DSGI] for the respondent no. 1; and Mr. T. Kipa, learned Standing Counsel, CGST for the respondent nos. 2 & 3.

6. Mr. Aape, learned counsel for the petitioner has submitted that in response to the Show Cause Notice, which was uploaded in the common portal, the petitioner could not submit a reply due to reasons beyond his control as it escaped his notice. No notice was served upon the petitioner manually. It is submitted that the petitioner came to learn about the Show Cause Notice when the time for filing the Reply was already over and the impugned Order dated 27.05.2023 had already been uploaded in the common portal. Though the petitioner tried to submit an application for revocation, the GST portal did not allow submission of such application as the time-limit prescribed for filing of revocation of application was already over by then. Similarly, the petitioner could not prefer an ap