2022 (9) TMI 1412 - HC - GST

Cancellation of registration of petitioner - appeal dismissed on the ground of limitation - non-speaking order - doctrine of merger - HELD THAT - This Court while deciding the case M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India and others 2022 (9) TMI 1047 - ALLAHABAD HIGH COURT had held that the order of cancellation of registration or any other order passed either on administrative or on judicial side is without any reason and prima facie, without application of mind, the same does not stand the test of scrutiny under Article 14 of the Constitution of India. Following the said judgment rendered in the case of M/s Chandrasen (Supra), the writ petition deserves to be allowed. The order dated 03.01.2022 is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice and the certified copy of this order within three weeks from today - the writ petition is allowed.

Summary

Issues:
1. Amendment application seeking quashing of cancellation order.
2. Challenge to cancellation of registration under Section 29 of the CGST Act.
3. Appeal dismissal on the ground of limitation.
4. Judicial review of non-speaking order.
5. Application of the doctrine of merger.
6. Application of Article 14 of the Constitution of India.

Analysis:
1. The judgment primarily dealt with an amendment application seeking to quash a cancellation order. The petitioner, engaged in the business of solar equipment, had its registration cancelled due to failure to furnish returns. An additional prayer in the amendment application sought to challenge the cancellation order dated 03.01.2022. The court allowed the amendment application, enabling necessary changes in the writ petition.

2. The main petition challenged the cancellation order under Section 29 of the Central Goods and Services Tax Act and the subsequent dismissal of the appeal. The petitioner's failure to respond to a show cause notice due to a family tragedy led to the cancellation. The court noted the importance of the petitioner's circumstances and the need for a fair review process.

3. The appeal dismissal based on limitation was contested by the petitioner's counsel, arguing that the doctrine of merger should not apply. Citing a previous judgment, the counsel highlighted the necessity of a speaking order and the application of judicial scrutiny under Article 14 of the Constitution of India. The court, following precedent, emphasized the requirement for reasoned decisions in administrative and judicial orders.

4. Considering the principles established in previous cases, the court allowed the writ petition, setting aside the cancellation order. The petitioner was granted the opportunity to present a reply to the show cause notice within a specified timeframe. The judgment underscored the importance of due process and fair consideration in matters of registration cancellation.

5. The judgment's significance lies in upholding the principles of natural justice and judicial review in administrative decisions. By allowing the writ petition and directing a fresh review of the cancellation order, the court reaffirmed the importance of reasoned and lawful administrative actions. The application of Article 14 of the Constitution of India was pivotal in ensuring fairness and transparency in the decision-making process.