2023 (10) TMI 1326 - HC - GST

Cancellation of GST registration of petition - non-constitution of Tribunal under Bihar Goods and Services Tax Act - HELD THAT - It is seen from the Bihar Goods and Services Taxes Rules, 2017, GST REG-19 has a specific column where reasons have to be assigned. However, the Assessing Officer seems to be laboring under the belief that when an assessee does not appear or an objection is not filed, no reasons have to be assigned - the said order cannot be countenanced, especially when there is absolutely no reason stated regarding the cancellation of registration. Reliance placed in the judgment of another Hon'ble Division Bench of this Court passed in Manoj Kumar Sah versus The State of Bihar and Anr. 2023 (1) TMI 791 - PATNA HIGH COURT wherein it has been held that the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only the order is nonspeaking, but cryptic in nature and the reason of cancellation not decipherable therefrom. Principles of natural justice stand violated and the order needs to be quashed as it entails penal and pecuniary consequences - The impugned order in the instant writ petition also suffers from the very same illegality which has been pointed out by the Division Bench. Petition allowed.

Summary

Issues:
The cancellation of registration without providing reasons and the legality of the order under Bihar Goods and Services Tax Act.

The High Court of Patna addressed the issue of cancellation of registration by Annexure-2 order dated 22.04.2022, which was delayed and subsequently rejected. The Court noted the absence of a Tribunal constituted for the State under the Bihar Goods and Services Tax Act.

Upon reviewing the order at Annexure-2, the Court observed that it lacked reasoning for the cancellation and did not specify the subject of the notice. The Court highlighted the form GST REG-19, emphasizing the necessity for reasons to be assigned in the cancellation order.

The Court found that the Assessing Officer erroneously believed that reasons need not be assigned when an assessee does not appear or file an objection. This misconception was deemed unacceptable by the Court, especially when no reasons were stated for the cancellation of registration.

Citing a previous judgment, the Court emphasized the importance of natural justice and the need for cancellation orders to be explicit and non-cryptic. The Court concluded that the impugned order suffered from similar deficiencies and directed the reconsideration of the issue.

Furthermore, the Court noted the introduction of notification No. 3 of 2023 by the Central Government, allowing a period until 30.06.2023 for registered persons to apply for cancellation invocation under specific conditions. This remedy was applicable if cancellation was due to failure to file returns under certain clauses of Section 29.

In light of the above, the Court allowed the writ petition, setting aside the Annexure-2 order and mandating a reevaluation of the cancellation issue.