2024 (3) TMI 1025 - HC - GST

Rejection of petitioner s application for amendment of the registration, namely, change in address of the petitioner - no opportunity of a hearing was granted to the petitioner before the order is passed - violation of principles of natural justice - HELD THAT - On a plain reading of Section 28, it is clear that sub-section (1) is an obligation of every registered person and a person to whom a Unique Identity Number (UIN) has been assigned to mandatorily inform the proper officer of any changes in the information furnished at the time of registration or subsequent thereto, in the form as prescribed. Sub-section (2) thereof provides that the proper officer may on the basis of information furnished under sub-section (1) or as ascertained by him, approve or reject amendments in the registration particulars in such manner and within such period as may be prescribed. The mandate of proviso below sub-section (2) of Section 28 as applied to the present facts brings about a consequence that the impugned order would be required to be held to be in breach of sub-section (2) of Section 28 inasmuch as the petitioner was not granted an opportunity of being heard before the impugned order was passed. Such action on the part of respondent no. 3 clearly breached the mandate of proviso below sub-section (2) of Section 28. On such count alone, the impugned order would be rendered bad and illegal. This apart, there are serious consequences which are brought about in rejection of an application for amendment. The impugned order also cannot be sustained for the reason that no reasons whatsoever are furnished in rejecting the petitioner s application for amendment of the registration. It is well settled that in passing any quasi-judicial order, necessarily reasons are required to be attributed, as the reasons would not only demonstrate an application of mind by the concerned officer in taking the decision but also it would enable the person whose application is rejected to know as to what were the reasons which weighed with the authority in rejecting the application. Thus, in the absence of any reason, any quasi-judicial order would be rendered arbitrary, which the law would not recognize to be a valid order. There can be no two opinions that the impugned order dated 3 November, 2023 would be required to be quashed and set aside - Petition allowed. Suspension of registration of the petitioner and issuing show cause notice for cancellation of the registration - blocking of Input Tax Credit of the petitioner - HELD THAT - There appears to be much substance in the contentions as urged on behalf of the petitioner. It appears that the basis for suspension of the petitioner s registration is on the very issue on the petitioner s place of business, which was subject matter of the amendment application filed by the petitioner. Such amendment application being rejected, has already been set aside by us by the order passed in the aforesaid Writ Petition. Sofar as the blocking of ITC is concerned, the same has clearly arisen from such issues on the place of business of the petitioner in regard to which an amendment application was filed by the petitioner to amend the registration. Respondent no. 3 needs to pass an order on the application of the petitioner for amendment of registration within a period of two weeks and subject to the orders which may be passed thereon further appropriate course of action can be adopted as may be permissible in law on any suspension of the petitioner s registration, as also on the blocking of the ITC if so necessitated - thus, insofar as the show cause notice dated 20 December, 2023 issued to the petitioner by respondent no. 3 is concerned in regard to the cancellation of the registration and considering the reasons as set out in the show cause notice, the fate of the same would certainly depend upon on the orders which respondent no. 3 would intend to pass on the petitioner s amendment application. Petition disposed off.

Issues Involved:
1. Rejection of amendment application for change of address.
2. Suspension of registration and issuance of show cause notice for cancellation.
3. Blocking of Input Tax Credit (ITC).

Summary:

Issue 1: Rejection of Amendment Application for Change of Address

The petitioner challenged the order dated 3 November 2023 by the Deputy Commissioner of State Tax, Bandra (West), Mumbai, which rejected the petitioner's application for amendment of the registration to change the address of the principal place of business. The petitioner argued that the order violated Section 28 of the CGST Act, 2017, specifically the second proviso of sub-section (2), which mandates an opportunity of being heard before rejecting an amendment application. The court noted that no hearing was granted, and no reasons were provided for the rejection, rendering the order arbitrary and illegal. The court quashed the impugned order and directed respondent no. 3 to pass a fresh order after hearing the petitioner within two weeks.

Issue 2: Suspension of Registration and Issuance of Show Cause Notice for Cancellation

The petitioner sought to quash the order dated 20 December 2023 by the Deputy Commissioner of State Tax, which suspended the petitioner's registration and issued a show cause notice for cancellation. The show cause notice cited non-conduct of business from the declared place and violation of Rule 10 of the CGST Rules regarding bank details. The petitioner contended that the bank details were provided and that the rejection of the amendment application was illegal. The court observed that the suspension was based on the same issue of the place of business, which was already addressed in the previous writ petition. The court directed respondent no. 3 to decide on the amendment application within two weeks and take further action based on the outcome.

Issue 3: Blocking of Input Tax Credit (ITC)

The petitioner also challenged the blocking of ITC amounting to Rs. 1,37,76,580/-, which was a system-generated communication based on the same issue of the place of business. The court noted that the blocking of ITC was linked to the amendment application and directed that further action be taken based on the decision on the amendment application.

Orders:

1. The impugned order dated 3 November 2023 was quashed and set aside.
2. Respondent no. 3 was directed to pass a fresh order after hearing the petitioner within two weeks.
3. The petitioner was permitted to file a reply to the show cause notice dated 20 December 2023.
4. Respondent no. 3 was directed to pass an appropriate order considering the reply to the show cause notice and the decision on the amendment application.
5. Liberty was granted to the petitioner to file appropriate proceedings against any adverse orders on suspension/cancellation/blocking of ITC.
6. The petition was disposed of with no costs.

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