2023 (3) TMI 163 - HC - GST

Cancellation of registration of petitioner - cancellation on the ground of 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 and, thus, an order came to be passed whereby registration of the petitioner was cancelled - HELD THAT - The present petitioner is also entitled for the benefit of the order passed by this Court in Technosum India Pvt. Ltd. Lucknow Vs. Union of India and 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. The present petitioner is also entitled for the same relief. The benefit of the order dated 26.9.2022 passed in Writ Tax No.145 of 2022, shall also be made available to the present petitioner. The order as well as the appellate order is set aside and the petitioner is permitted to appear before the respondent along with the reply to show cause notice - Petition allowed.

Summary

Issues:
Challenge to cancellation of GST registration based on non-filing of GST return, Appeal dismissal on grounds of delay, Right to be heard before cancellation, Application of judicial precedents on non-speaking orders.

Analysis:
The judgment by Hon'ble Vivek Chaudhary, J., of the Allahabad High Court addresses the challenge to the cancellation of GST registration due to non-filing of GST return. The petitioner, a sole proprietary of an advertising agency firm, had their registration cancelled after failing to file a reply to a show cause notice issued on 30.5.2022. The petitioner's appeal against the cancellation was dismissed on grounds of delay.

The petitioner argued that not being heard before the cancellation violated their rights. Citing a previous judgment in Technosum India Pvt. Ltd. Lucknow Vs. Union of India, the petitioner contended that cancellation solely for failing to reply to a show cause notice is unjustified. The Court in Technosum India Pvt. Ltd. Lucknow case held that orders lacking reasons and not applying the mind do not meet the scrutiny under Article 14 of the Constitution. The petitioner sought similar relief based on this precedent.

The Court agreed with the petitioner, granting relief and setting aside the order of cancellation and the dismissal of the appeal. The petitioner was directed to appear before the respondent with the reply to the show cause notice and certified copies of the judgment within three weeks. The respondent was instructed to pass a fresh order in accordance with the law upon the petitioner's compliance.

In conclusion, the judgment emphasizes the importance of providing reasons for administrative decisions, especially in cases of cancellation of registrations. It upholds the right of the petitioner to be heard and relies on judicial precedents to ensure fair treatment and due process in such matters.