2023 (3) TMI 162 - HC - GST

Cancellation of GST registration of petitioner - non-submission of reply to SCN - case of the petitioner is that he has not been able to get the show cause notice issued by the respondent and, therefore, he could not submit the reply within the stipulated time - HELD THAT - The present petitioner is entitled for the benefit of the order passed by this Court in TECHNOSUN INDIA PVT. LTD. LUCKNOW THRU. ITS DIRECTOR AMIT KUMAR GAUTAM VERSUS UNION OF INDIA THRU. PRIN. COMMISSIONER, CENTRAL G.S.T., LKO. U.P. AND 2 OTHERS 2022 (9) TMI 1412 - ALLAHABAD HIGH COURT . In the said judgment, the Court has held that the impugned order does not assign any reason whatsoever for cancelling registration of the petitioner and is passed only on the ground that reply to the show cause notice is not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration. In view thereof, the present petitioner is also entitled for the same relief - the order dated 23.01.2021 as well as the appellate order dated 06.02.2023, 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 - petition allowed.

Summary

Issues:
Challenge to cancellation of GST registration based on non-submission of GST return and delay in reply to show cause notice.

Analysis:
The petitioner, a sole proprietor of a firm engaged in motor work, had their GST registration cancelled due to non-filing of GST return and a subsequent show cause notice. The petitioner claimed they did not receive the notice, leading to a delayed response and eventual cancellation of registration. The appellate authority dismissed the appeal citing delay as the reason.

The petitioner argued that the cancellation order was self-contradictory, stating submission and non-submission of reply in the same document. They also contended that not being heard during the cancellation process was a violation of their rights. Reference was made to a previous judgment (Technosum India Pvt. Ltd. Lucknow Vs. Union of India) where the court held that cancellation solely for non-submission of reply was unjustifiable.

Citing the doctrine of merger and the need for reasons in administrative decisions, the petitioner sought judicial review based on the precedent set by another case (M/S Chandrasen, Sarda Nagar, Lucknow vs Union of India). The court agreed with the petitioner's arguments, granting relief similar to the Technosum India Pvt. Ltd. case.

The court allowed the petition, setting aside the cancellation order and the appellate decision. The petitioner was instructed to appear before the respondent with the required documents within three weeks. If the petitioner complied, the respondent was directed to issue a fresh order following legal procedures.

In conclusion, the judgment favored the petitioner, emphasizing the importance of due process and proper reasoning in administrative decisions, especially concerning GST registration cancellations. The court's decision was influenced by previous judgments highlighting the need for valid grounds and fair treatment in such matters.