2024 (3) TMI 55 - HC - GST

Cancellation of GST registration of the petitioner - mere system generated order - non-application of mind by the proper officer - perusal of SCN shows that the same did not contain any date or time or venue where the petitioner had to appear in response to the show cause notice - principles of natural justice - HELD THAT - There are no merit in the objection by learned counsel for respondents that there is delay in filing the subject petition and the statutory remedies of revocation has not been availed of by the petitioner. First and foremost, there is no limitation for filing a petition under Article 226 of the Constitution before this Court. Clearly, when this Court noticed a complete non-application of mind on the part of the proper officer, no purpose would be served in relegating an individual to filing the revocation petition. Repeatedly, this Court is flooded with petitions where there are similar system generated order which ex facie demonstrate non-application of mind. Further, the petitioner is stated to be an electrician doing petty jobs. Petition allowed.

Summary

Issues:
The issues involved in this case are the cancellation of GST registration due to failure to file returns for a continuous period, lack of proper notice for appearance, non-application of mind by the Superintendent in passing the cancellation order, and the restoration of GST registration.

Cancellation of GST Registration:
The petitioner challenged the order cancelling their GST registration effective from 31.12.2020 due to non-filing of returns for a continuous period of six months. The show cause notice lacked specific details regarding the date, time, and venue for the petitioner to respond. The subsequent cancellation order referred to a reply dated 09.05.2020, even though no such reply was filed. The order failed to provide a valid reason for cancellation, with the amount payable shown as Nil. The High Court found the cancellation order unsustainable due to the Superintendent's apparent non-application of mind, set it aside, and restored the petitioner's GST registration.

Lack of Proper Notice:
The show cause notice issued to the petitioner did not specify the date, time, or venue for the petitioner to respond. This lack of clarity raised concerns regarding the procedural fairness and the petitioner's ability to effectively address the allegations against them. The High Court noted this deficiency in the notice as a procedural flaw that contributed to the subsequent issues in the case.

Non-Application of Mind in Cancellation Order:
The cancellation order of the GST registration displayed a clear lack of application of mind by the Superintendent who passed the order. Despite claiming to consider a reply from the petitioner, no such reply was filed. The order did not provide a valid reason for cancellation other than a numerical reference, and the amount payable was incorrectly shown as Nil. The Court held that the system-generated nature of the order further demonstrated the lack of proper consideration by the officer. Consequently, the Court set aside the cancellation order and reinstated the petitioner's GST registration.

Restoration of GST Registration:
In setting aside the cancellation order, the High Court restored the petitioner's GST registration. However, the Court directed the petitioner to fulfill all necessary compliances, file requisite returns, and provide information as per Rule 23 of the Central Goods and Services Tax Rules, 2017. The petitioner was also instructed to make the payment of requisite delay charges to ensure compliance with the reinstatement of their GST registration.

Conclusion:
The High Court allowed the petition, emphasizing that there is no limitation for filing a petition under Article 226 of the Constitution. The Court rejected the objection regarding delay in filing the petition and the failure to avail statutory remedies for revocation. Highlighting the systemic issue of non-application of mind in similar cases, the Court granted relief to the petitioner, noting their occupation as an electrician doing petty jobs. The petition was allowed, and the GST registration was restored, with the petitioner instructed to comply with necessary requirements and payment obligations.