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2022 (12) TMI 195 - HC - GSTCancellation of registration of petitioner, with retrospective effect - It is the case of the petitioner that despite following the mandate under the law, it received a show cause notice for cancellation of registration - reasonable opportunity of hearing provided or not - principles of natural justice - HELD THAT - In the opinion of this Court, it is a settled legal position of law that reasons are heart and soul of the order and noncommunication of the same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. More so, in this case even the appeal order also does not reflect application of mind by the competent authority. In the decision of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) 2022 (4) TMI 864 - GUJARAT HIGH COURT , this Court after considering the scheme of Act as well as the procedure contemplated under the provisions of the Act for cancellation of registration has held that we notice that it is settled legal position of law that reasons are heart and soul of the order and non communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. Applying the same principles particularly on the ground that the show cause notice as well as the order rejecting application seeking revocation of cancellation is without assigning any reasons and thereby there is a clear violation of principles of natural justice, the writ petition is allowed. The show cause notice dated 28.2.2022 and consequential order dated 9.3.2022 as also the order rejecting the application of the petitioner seeking revocation dated 26.4.2022 and appeal order dated 12.10.2022 are set aside - petition allowed.
Issues:
Challenge to show cause notice for cancellation of registration, rejection of application for revocation of cancellation of registration, appeal order cancelling GST number with retrospective effect. Analysis: The petitioner challenged a show cause notice dated 28.2.2022 for cancellation of registration, an order rejecting the application for revocation of cancellation of registration dated 26.4.2022, and an appeal order dated 12.10.2022 cancelling the GST number with retrospective effect. The petitioner, engaged in buying and selling scrap materials, had been operating under the name M.M. Scrap Trading with a valid GST number since 11.2.2020. Despite complying with legal requirements, the registration was cancelled without proper consideration of the petitioner's submissions. The petitioner contended that the cancellation severely impacted their business operations. The petitioner filed an appeal enclosing evidence of business genuineness, but the appeal was rejected without reasons provided by the competent authority. The petitioner's advocate argued that the show cause notice lacked reasons, and the subsequent orders were passed without considering the petitioner's submissions. The advocate highlighted the violation of principles of natural justice, citing a similar case decided in favor of the petitioner by a Coordinate Bench. The respondent's advocate acknowledged that the petitioner's reply was considered but failed to justify the absence of reasons in the notice and orders. The Court emphasized the importance of providing reasons in administrative decisions, stating that the absence of reasons denies a reasonable opportunity of hearing and results in a miscarriage of justice. Citing the decision in Aggarwal Dyeing and Printing Works, the Court reiterated that reasons are essential for judicial review and accountability. The Court quashed the show cause notice, cancellation order, rejection order, and appeal order, directing the respondent to issue a fresh notice with detailed reasons and provide a reasonable opportunity of hearing to the petitioner. In conclusion, the Court allowed the writ petition, emphasizing the necessity of reasons in administrative decisions and the principles of natural justice. The petitioner was granted the opportunity to respond to a fresh notice with objections and documents, clarifying that the Court did not delve into the merits of the case. No costs were awarded in the judgment.
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