2024 (9) TMI 99 - HC - GST

Cancellation of registration of petitioner - cancellation challenged on the ground of not providing an opportunity of hearing as well as such order was passed without assigning any reason for cancellation of the registration of the petitioner - violation of principles of natural justice - HELD THAT - The Coordinate Bench of this Court in case of AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) 2022 (4) TMI 864 - GUJARAT HIGH COURT has issued the guidelines to the respondent-authorities holding that ' Until the Department is able to develop and upload an appropriate software in the portal which would enable the Department to feed all the necessary information and material particulars in the show cause notice as well as in the final order of cancellation of registration that may be passed, the authority concerned shall issue an appropriate show cause notice containing all the necessary details and information in a physical form and forward the same to the dealer by RPAD. In the same manner, when it comes to passing the final order, the same shall also be passed in a physical form containing all the necessary information and particulars and shall be forwarded to the dealer by RPAD.' The aforesaid judgement was rendered in the year 2022. However, in spite of the above direction issued by this Court, the respondent-authorities without following such directions are issuing cryptic notice and order for cancellation of registration number of the petitioner. In the present matter, order of cancellation of registration is passed without giving any reason by the respondent authorities, and appeals filed by the petitioners under Section 107 of the GST Act are also dismissed. The matter is remanded back to the Assessing Officer at the show cause notice stage. However, the registration of the petitioner shall remain suspended till the show-cause notice is decided by the Assessing Officer as per the directions imposed - This petition is accordingly disposed of.

Summary

Issues:
Challenge to order of cancellation of registration on grounds of lack of hearing and reasons provided; Non-compliance with court guidelines on show cause notices; Dismissal of appeals under Section 107 of GST Act; Remand of matter to Assessing Officer with specific directions.

Analysis:

The petitioner challenged the order of cancellation of registration on the basis of not being provided with an opportunity of hearing and the absence of reasons for the cancellation. The Appellate Authority upheld the cancellation order on the ground of limitation, leading to the dismissal of the appeal filed by the petitioner under Section 107 of the GST Act. The petitioner contended that the respondent authorities were issuing cryptic notices and orders for cancellation of registration despite court guidelines issued in a previous judgment. The court emphasized the importance of following procedural aspects diligently to avoid unnecessary litigation, as highlighted in the earlier case of M/s. Aggrawal Dyeing & Printing vs. State of Gujarat. The court directed the respondent authorities to issue detailed show cause notices with reasons incorporated and provide a reasonable opportunity of hearing to the petitioners before passing appropriate orders on merits.

The court noted that the order of cancellation of registration in the present matter was passed without providing any reasons by the respondent authorities, and the appeals filed by the petitioners under Section 107 of the GST Act were also dismissed. As a result, the revisional power under Section 108 of the GST Act could not be exercised by the respondent authorities. Therefore, the court quashed and set aside the impugned orders, remanding the matter back to the Assessing Officer at the show cause notice stage. The registration of the petitioner was to remain suspended until the show cause notice was decided by the Assessing Officer, with specific directions provided for the process to be followed.

The court partly allowed the petition by setting aside the impugned orders and remanding the matter to the Assessing Officer for further proceedings in accordance with the provided directions. It was clarified that the court did not delve into the merits of the case, emphasizing that the respondent authorities must pass appropriate orders in compliance with the law after providing detailed reasons and an opportunity of hearing to the petitioner. The petition was disposed of, with notice discharged and no order as to costs issued.