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HIGH COURT OF GUJARAT
SONIA GOKANI, MAUNA M. BHATT, JJ
JATIN BHAGWATLAL SHAH – Appellant
Versus
STATE OF GUJARAT – Respondent
R/SPECIAL CIVIL APPLICATION NO. 18201 of 2022
For the Appellants/Petitioners: UCHIT N SHETH
For the Respondents: MS POOJA ASHAR, ASST.GOVERNMENT PLEADER
Administrative authorities are required to provide justified, reasoned decisions and fair hearing opportunities before cancelling registrations to ensure procedural fairness.
Headnote:(A) Goods and Services Tax Act, 2017 - Section 107 - Cancellation of registration - Petition challenging the cancellation order under GST revealing non-compliance of procedural norms by authorities - Appeal dismissed without hearing - Order found to be non-speaking and mechanistic, disregarding prior presence of petitioner - Court emphasizes the necessity for proper communication and fair hearing in administrative proceedings. (Paras 1 and 10)
(B) Administrative Law - Non-speaking orders - Legal principles require that governmental decisions must be justified and explained, allowing for proper recourse and communication to the affected party. (Paras 7 and 10)
Facts of the case:
The petitioner challenged the cancellation of his GST registration, alleging non-communication during spot visits and absence of opportunity for hearing despite having submitted a reply. Issues of retrospective cancellation were raised, which the petitioner argued adversely affected his business continuity.
Findings of Court:
The Court concluded the cancellation was arbitrary due to lack of justification and proper hearing, and the petitioner’s evidence regarding relocation was not credibly addressed by the Revenue agencies.
Issues: Whether adequate notice was provided and procedural fairness upheld in the administrative action for cancellation of registration.
Ratio Decidendi: The Court ruled that administrative bodies must provide fair opportunity and adequately reasoned decisions in their orders, especially when affecting livelihoods.
Result: Petition allowed, with orders quashed and registration restored.
ORDER
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1 This is a petition challenging the order dated 20.08.2022 passed under section 107 of the Central/Gujarat Goods and Services Tax Act, 2017 (GST Act) confirming cancellation of registration certificate under the GST Act. The Authority proceeded to dismiss the appeal by order dated 20.08.2022. It is also averred that the order of cancellation of registration is also non-speaking. It is cancelled on the ground that the petitioner did not remain present even though, admittedly, the petitioner submitted the reply and no opportunity of hearing was given. The registration of the petitioner stood suspended from 29.01.2022. He was present at the time of spot visit and did explain to the authority. However, his appeal came to be dismissed and he is before this Court. The petitioner has no other remedy. Retrospective cancellation of the registration of certificate, according to him, is causing a cascading effect and, hence, this petition with the following reliefs:
- “33.
- In view of the aforesaid premises, the Petitioner humbly prays that:
- RELIEFS CLAIMED A.
- This Hon’ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside impugned order dated 20.8.2022 (annexed at Annexure A) passed by Respondent No.2 as well as impugned order dated 19.3.2022 ( annexed at Annexure J) passed by the Respondent No.3;
- B.
- This Hon’ble Court may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith restore the registration certificate of the Petitioner under the GST Acts;
- C.
- Without prejudice to the above and in the alternative this Hon’ble Court may be pleased to declare that impugned order dated 19.3.2022 (annexed at Annexure J) passed by the Respondent No.3 canceling registration certificate of the Petitioner under the GST Acts will operate only prospectively with effect from date of order of cancellation;
- D.
- Pending, notice, admission and final hearing of this petition, this Hon’ble Court may be pleased to stay the retrospective operation of the impugned order dated 19.3.2022 (annexed at Annexure J) canceling the registration certificate of the Petitioner under the GST Acts;
- E.
- Ex parte ad interim relief in terms of prayer D may kindly be granted;
- F.
- Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioners shall forever pray.”
2 Affidavit-in-reply is filed denying all paragraphs.
3 It is not in dispute that the petitioner has challenged the order of 20.08.2022 passed under section 107 of the GST Act confirming the order of cancellation of registration of certificate under the GST Act on the ground that despite justification provided by the petitioner, the same is not considered. The spot visit of principal place of business was conducted by respondent authorities on 14.12.2021, 15.02.2022 and 09.05.2022 by the authorised officer, but he did not find any stock, register of accounts or infrastructure.
Hence, on 26.04.2022, the petitioner was intimated about the spot visit to be conducted at the principal place of business. According to the petitioner, the proceedings under section 67 are on going. Without prejudice to this proceedings, if the revocation of registration is ordered in favour of the petitioner, the same shall not affect the interest of the Revenue.
4 Affidavit-in-rejoinder is filed by the petitioner, where it challenges the cancellation of registration and that too with retrospective effect only on the basis of minor procedural difficulty. The spot visit was without giving notice to the petitioner. He was not present at the place of business and, therefore, the same was closed and adverse inference is drawn from that.
