2024 (6) TMI 1306 - HC - GST

Violation of principles of natural justice - non-speaking order - petitioners have not been given any supportive documents of notice and as such the petitioners were asked to remain present for hearing on the very same day in the afternoon - cancellation of GST registration of petitioner - HELD THAT - This Court in the case of Aggarwal Dyeing and Printing Works 2022 (4) TMI 864 - GUJARAT HIGH COURT , the Coordinate Bench of this Court has discussed the law with regard to show cause notice as well as the importance of the principles of natural justice in great detail, and it was held that ' the sum and substance of various judgments on the principles of natural justice is to the effect that wherever an order is likely to result in civil consequences, though the statute or provision of law, by itself, does not provide for an opportunity of hearing, the requirement of opportunity of hearing has to be read into the provision.' Keeping in mind the facts of the present case, it appears that the show cause notice, which was issued upon the petitioners dated 8th April 2022, wherein the petitioners were directed to remain present on the very same date i.e. on 8th April 2022 for the purpose of explaining the show cause notice. It is also an undisputed fact that along with the show cause notice, the petitioners were not given any material evidence which is sought to be relied upon in support of the show cause notice. In this light, if the impugned order dated 22nd April 2022 is perused, the said order is completely non-speaking and cryptic order. The facts of the present case and the facts in the case of Aggarwal Dyeing and Printing Works are identical and similar in nature and thereby, we are unable to take any different view than the view taken by the Coordinate Bench of this Court in the case of Aggarwal Dyeing and Printing Works. Accordingly, the present petition deserves to be allowed solely on the ground of violation of principles of natural justice. The petition is allowed.

Summary

Issues Involved:
1. Validity of the show cause notice dated 8th April 2022.
2. Validity of the impugned order dated 22nd April 2022 cancelling the petitioners' GST registration.
3. Alleged violation of principles of natural justice.

Detailed Analysis:

1. Validity of the Show Cause Notice Dated 8th April 2022:
The petitioners challenged the show cause notice issued on 8th April 2022, arguing that it was vague and lacked necessary material evidence. The notice required the petitioners to appear on the same day, which was deemed unreasonable. The court noted that the notice did not provide any supportive documents, making it difficult for the petitioners to prepare an adequate response. The court referenced the judgment in Aggarwal Dyeing and Printing Works vs. State of Gujarat, emphasizing the importance of detailed and reasoned show cause notices to comply with the principles of natural justice.

2. Validity of the Impugned Order Dated 22nd April 2022 Cancelling the Petitioners' GST Registration:
The petitioners contended that the impugned order was "completely cryptic, arbitrary and in breach of principles of natural justice and non-speaking order." The court agreed, noting that the order was non-speaking and lacked detailed reasoning, thus failing to meet the legal standards set by previous judgments. The court reiterated that "reasons are heart and soul of the order," and the absence of reasons amounts to a denial of a reasonable opportunity of hearing, leading to a miscarriage of justice.

3. Alleged Violation of Principles of Natural Justice:
The court found that the actions of the respondent authorities were in gross violation of the principles of natural justice. The petitioners were not given adequate time to respond to the show cause notice, nor were they provided with the necessary material evidence. The court emphasized that any order likely to result in civil consequences must adhere to the principles of natural justice, even if the statute does not explicitly provide for it. The court cited multiple judgments to support this view, including the necessity for detailed and reasoned decisions to ensure fairness and transparency.

Conclusion:
The court quashed the show cause notice dated 8th April 2022 and the impugned order dated 22nd April 2022, citing a violation of the principles of natural justice. The court granted liberty to the respondent to issue a fresh notice with detailed reasons and to provide a reasonable opportunity for the petitioners to respond. The petition was allowed solely on the grounds of procedural impropriety, without delving into the merits of the case.