2022 (12) TMI 857 - HC - GST

Cancellation of registration of petitioner - non-furnishing of return for a contentious period of six months under Section 39 of the Central Goods and Services Tax Act - HELD THAT - There are no reason whatsoever in the impugned order for cancelling the registration fo the petitioner. The only reason stated that the petitioner did not respond to the show cause notice. This Court is of the considered view that even in case that the petitioner did not given response to the show cause notice it was incumbent to the competent authority to consider the fact of case and come to the conclusion that the facts necessitate cancellling of the registration of the petitioner in exercise of powers under Section 39 of the CGST Act. The impugned order dated 03.01.2022 is illegal and hence in the aforesaid circumstances, the same is set aside - the matter is remitted to the adjudicating authority and is further directed to the petitioner to file his reply to show cause notice dated 02.12.2021 within three weeks for today - petition allowed by way of remand.

Summary

Issues:
Challenge to cancellation of registration under Section 29 of CGST Act and dismissal of appeal on the ground of limitation.

Analysis:
The petitioner, engaged in manpower supply business, challenged the cancellation of registration under Section 29 of the CGST Act and the dismissal of the appeal. The petitioner failed to respond to a show cause notice due to personal reasons, leading to the cancellation of registration. The petitioner contended that the cancellation was unjust as no reasons were provided in the order for cancellation other than non-response to the notice. The petitioner argued that the authority should have considered the circumstances before cancelling the registration under Section 39 of the CGST Act.

The petitioner, unable to appeal before the GST Tribunal due to its non-constitution in Uttar Pradesh, sought judicial review. The petitioner claimed that the dismissal of the appeal beyond the limitation period warranted judicial review as the order was non-speaking. Referring to a previous judgment, the petitioner argued that orders lacking reasons or application of mind do not uphold constitutional scrutiny under Article 14. The Court observed that the impugned order lacked reasons for cancellation other than non-response to the notice, emphasizing the authority's duty to consider the case's facts before cancellation under Section 39 of the CGST Act.

Consequently, the Court deemed the cancellation order illegal and set it aside. The matter was remitted to the adjudicating authority with directions for the petitioner to file a reply to the show cause notice within three weeks. Upon submission of the reply along with a copy of the order, the respondent was instructed to issue a fresh order in compliance with the law.